Agreement Not To Compete Template for South Africa

The Agreement Not To Compete is a crucial legal instrument in South African business practice, designed to protect legitimate business interests while balancing constitutional rights to freedom of trade. It is commonly used in employment relationships, business sales, partnership dissolutions, and independent contractor arrangements. The document typically specifies restricted activities, geographic limitations, and time periods during which competition is prohibited. Key considerations include South African competition law compliance, constitutional rights, and common law principles established through cases like Magna Alloys. The agreement must demonstrate reasonableness in both scope and duration, with courts generally requiring clear evidence of legitimate business interests requiring protection. It's particularly relevant in scenarios involving access to trade secrets, confidential information, customer relationships, or specialized training investments.

1. Parties: Identification of the parties entering into the agreement, including their full legal names, registration numbers (if companies), and physical addresses

2. Background: Context of the agreement, including the nature of the relationship between the parties and the legitimate business interests being protected

3. Definitions: Detailed definitions of key terms used in the agreement, including 'Confidential Information', 'Competing Business', 'Restricted Territory', and 'Restricted Period'

4. Duration of Restraint: Specific timeframe during which the non-compete obligations will be effective

5. Geographic Scope: Clear definition of the geographic areas where the non-compete restrictions apply

6. Restricted Activities: Detailed description of the specific activities, businesses, and actions that are prohibited

7. Protection of Confidential Information: Obligations regarding the protection and non-use of confidential information

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

9. Remedies: Available remedies in case of breach, including injunctive relief and damages

10. General Provisions: Standard clauses including governing law, jurisdiction, entire agreement, and severability