What is a Non-Compete Clause?
A non-compete clause is a part of a contract where one party (usually an employee or a partner) agrees not to enter into or start a similar profession or trade in competition against another party (usually the employer or vendor). These clauses are designed to protect a company's trade secrets and customer relationships. In a partnership, a vendor might ask a partner to sign a non-compete clause to prevent them from selling a direct competitor's product. These clauses must be reasonable in their scope, duration, and geographic area to be legally enforceable.