Not To Compete Agreement Template for New Zealand

The Not To Compete Agreement is a crucial legal instrument used in New Zealand business contexts to protect legitimate business interests from competition by former employees, business partners, or sellers of businesses. This document is typically implemented when there is a need to safeguard confidential information, customer relationships, or other valuable business assets from being used competitively against the protected party. It must comply with New Zealand law, particularly the Contract and Commercial Law Act 2017 and relevant employment legislation, ensuring that restrictions are reasonable in terms of duration, geographical scope, and scope of activities. The agreement is commonly used in employment terminations, business sales, partnership dissolutions, or contractor engagements where one party has gained significant knowledge or relationships that could potentially harm the other party's business interests if used competitively.

1. Parties: Identifies and defines the parties to the agreement, including the business/employer and the restricted party

2. Background: Sets out the context of the agreement, including the business's legitimate interests requiring protection

3. Definitions: Defines key terms used throughout the agreement, including 'Confidential Information', 'Restricted Business', 'Territory', etc.

4. Duration and Territory: Specifies the time period and geographical area where the restrictions apply

5. Non-Compete Obligations: Details the specific activities the restricted party is prohibited from engaging in

6. Non-Solicitation Obligations: Prohibitions on soliciting customers, employees, or suppliers

7. Confidentiality Obligations: Requirements to maintain confidentiality of business information

8. Acknowledgments: Party acknowledgments regarding reasonableness of restrictions and receipt of consideration

9. Consideration: Details of what the restricted party receives in exchange for the restrictions

10. Breach and Remedies: Consequences of breach and available remedies including injunctive relief

11. General Provisions: Standard contract terms including governing law, severability, and entire agreement