Active Non Compete Agreement Template for India

The Active Non-Compete Agreement is a critical legal document used in Indian business contexts to protect an organization's legitimate business interests during the period of employment or business association. It becomes essential when employees or business associates have access to sensitive information, key client relationships, or specialized knowledge that could be detrimental to the organization if used in competition. Under Indian law, particularly considering Section 27 of the Indian Contract Act, 1872, non-compete restrictions are primarily enforceable during the active employment period, with post-employment restrictions facing stricter scrutiny. The agreement must carefully balance the organization's need to protect its interests with the constitutional right to livelihood under Article 19(1)(g) of the Indian Constitution. This document typically includes specific provisions about restricted activities, geographical limitations, duration, and consequences of breach, while ensuring reasonable and legally enforceable terms.

1. Parties: Identification of the employer and employee/contractor with full legal names and addresses

2. Background: Context of the agreement, nature of employment/business relationship, and legitimate business interests being protected

3. Definitions: Key terms including 'Confidential Information', 'Competing Business', 'Territory', 'Restricted Period', and 'Business Activities'

4. Scope of Non-Compete: Clear description of prohibited activities, geographical limitations, and duration of restrictions

5. Duration and Territory: Specific timeframe and geographical area where restrictions apply, with justification for the scope

6. Consideration: Specific benefits or compensation provided in exchange for the non-compete obligations

7. Acknowledgments: Employee's acknowledgment of reasonableness of restrictions and receipt of consideration

8. Exceptions: Permitted activities and circumstances where restrictions don't apply

9. Remedies: Consequences of breach, including injunctive relief and damages

10. Severability: Provision for partial enforcement if any clause is found invalid

11. Governing Law: Specification of Indian law as governing law and jurisdiction