A non compete agreement meaning is a legal contract between an employer and an employee (or between businesses) that restricts one party from engaging in competing activities after leaving a job or partnership. It is commonly used to protect business interests, trade secrets, and confidential information. I have shared more information about this agreement below.
What is a Non Competition Agreement?
Usually, these contracts limit employees by industry, time, and/or location. Under Section 27 of the Indian Contract Act, 1872, any agreement restraining trade or profession is void. However, non-compete clauses may be valid during employment but are usually unenforceable after employment termination.
If the restriction is reasonable in scope, duration, and geography, courts may uphold it. Non-compete agreements in business sales, franchising, or partnerships are more enforceable.
Employers may include NCAs to prevent employees from joining competitors or starting similar businesses.
However, post-employment restrictions are struck down by Indian courts as they violate an individual’s right to live.
In cases of mergers, acquisitions, or franchise agreements, NCAs can be enforceable to protect business goodwill.
This is all about what is a non compete agreement.
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What is a Non Compete Agreement?
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2025-03-19T13:00:55+00:00 2025-03-27T11:30:42+00:00Comment
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