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Contract & Commercial Law vocabulary · Employment Contracts

Non-compete clause

Meaning in contract & commercial law, with examples

nounCore term

In contract & commercial law, non-compete clause means: A clause that stops a person or company from competing with the other party, for example by working for a rival, for a limited time and in a limited area.

In Turkish: rekabet yasağı maddesi, rekabet etmeme şartı

How it is used

Found in employment contracts, share sales and distribution deals. Courts generally enforce it only if it protects a legitimate interest and is reasonable in length, area and scope. It is also called a 'restrictive covenant' or 'non-competition clause'.

Example sentences

  1. The sales director's contract has a 12-month non-compete clause.

  2. A non-compete clause covering the whole world for ten years is unlikely to be enforced.

Common collocations

  • enforce a non-compete clause
  • breach a non-compete clause
  • restrictive covenant
  • non-compete period
  • non-solicitation clauseA clause that stops a party, for a limited time, from approaching the other party's employees or customers in order to take them away.
  • employment contractA contract between an employer and an employee that sets out the job, pay, working hours, holidays and the rules for ending the relationship.
  • enforceableAble to be made effective through a court or tribunal, so that a party can be forced to comply or to pay compensation.
  • trade secretValuable business information, such as a formula, a process or a customer list, that gives a company an advantage because it is kept secret.

This word in other fields

The same English word can have a different meaning in another field:

More terms: Employment Contracts

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This page explains English vocabulary for learners. It is not legal advice.