Non-Compete Agreement
Protect your business and client relationships with a legally reviewed non-compete clause
What is Non-Compete Agreement?
Non-compete clauses in India must be carefully drafted to be enforceable. We help you protect genuine business interests — client relationships, trade secrets, and key employees — within the limits of the Indian Contract Act, 1872.
Section 27 of the Indian Contract Act, 1872, makes any agreement in restraint of trade void to the extent it prevents a person from exercising a lawful profession, trade, or business. This does not mean non-compete clauses are useless — it means they must be carefully scoped. During employment or a business engagement, non-compete, non-solicitation, and confidentiality obligations are enforceable as part of the service contract. Post-termination restrictions are the ones at risk: courts have consistently held that a blanket prohibition on working in the same industry after leaving is void. What is enforceable post-termination is narrower: protection of specific trade secrets (under common law and the IT Act), non-solicitation of identified clients, and, in some cases, a time-limited restraint protecting a specific protectable interest (typically up to six months in a senior role). Partnership and shareholder agreements, sale-of-business agreements, and LLP agreements can carry wider post-term restrictions because they protect a purchased legitimate interest.
Who Needs Non-Compete Agreement?
Employers hiring key technical or sales staff, startups protecting client relationships and trade secrets from departing employees, parties to a business sale or merger, and LLP partners protecting their practice on a partner's departure.
What's Included
- During-employment obligations (non-solicitation, confidentiality) drafted to be clearly enforceable
- Post-employment restrictions scoped to what courts will uphold — protecting specific trade secrets and named client relationships
- Non-solicitation of clients and employees: enforceable with careful drafting
- Sale-of-business non-compete: enforceable for a reasonable geographic and time scope
- Garden leave clause as an alternative protective mechanism during transition
⚠️ Penalty for Non-Compliance
An overbroad non-compete that is void under Section 27 gives you no protection at all. Enforcement attempts on void clauses waste legal cost and damage employee relations.
How It Works
- 1
Identify the protectable interest
We help you identify what you actually need to protect — a client list, specific trade secrets, or a key relationship — rather than defaulting to a broad clause that courts will void.
- 2
Draft the clause
We draft a non-compete, non-solicitation, or trade-secrets protection clause appropriate for the employment context, business sale, or LLP agreement.
- 3
Review in context
The clause is reviewed in the context of the full agreement — employment contract, SHA, or partnership deed — to ensure it is proportionate and consistent.
- 4
Execution
The final agreement including the protective clause is executed.
Documents Required
Items marked Required are mandatory; others are situational.
Context
- Role and seniority of the person being boundRequired
- Specific interests to protect (client list, source code, formula)Required
- Context: employment contract, business sale, or partnership agreementRequired
Fees & Pricing
Fees
Government fee
No registration required
Professional fee
Quoted after identifying the protectable interest and context
* Government fees may vary. GST applicable on professional fees. Final pricing confirmed after review.
Frequently Asked Questions
Is a non-compete agreement enforceable in India?
During employment, yes. Post-employment, standard broad non-competes are generally void under Section 27 of the Indian Contract Act. Enforceable post-employment restrictions are narrow: protection of specific trade secrets, non-solicitation of named clients, and limited geographic and time-bound restraints in specific contexts.
What is a non-solicitation clause?
A non-solicitation clause prohibits a departing employee from approaching your existing clients or other employees for a defined period. This is more likely to be enforceable than a broad non-compete because it protects a specific identifiable interest.
What makes a non-compete stronger?
Specificity. A well-drafted clause identifies the specific clients, territories, or trade secrets being protected, restricts only what is necessary, and is tied to adequate consideration.
Can I have a non-compete in a business sale agreement?
Yes. In the context of a sale of a business or practice, the courts recognise that the buyer has purchased goodwill and client relationships, and a non-compete protecting that specific purchased interest is enforceable for a reasonable duration and geography.
What is a garden leave clause?
Garden leave requires a resigning employee to remain employed (and paid) but not actively work during their notice period. It prevents them from joining a competitor immediately while the employer secures client relationships and ensures handover.
What is the penalty for breaching a non-solicitation or trade-secrets clause?
The aggrieved party can seek an injunction and damages for losses caused. The strength of enforcement depends on how clearly the protectable interest is defined.
Detailed guides for Non-Compete Agreement
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