Corporate Law
Non-Compete Clause
A contractual provision restricting a person (often an employee or a seller of a business) from engaging in a competing business for a specified period.
While non-compete clauses are common, particularly in employment and business sale contracts, Indian law treats restraints on trade that extend beyond the term of employment or beyond the reasonable needs of protecting a business with considerable scepticism, meaning post-employment non-competes are generally difficult to enforce.
Non-competes tied to the sale of a business (restraining the seller from competing with the buyer) are, by contrast, much more likely to be upheld as reasonable and enforceable.
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