Non-Compete Agreement Template and How to Draft One (2026)

Before you use a non-compete template A non-compete agreement asks a person or a seller not to compete with a business for a set time, in a set place, in a set line of activity. Before you copy any template, understand one thing: whether a non-compete is enforceable depends heavily on where you are. The rule is not the same everywhere. - India. A post-employment non-compete is generally void. The law on restraint of trade treats an agreement that stops someone from exercising a lawful profession or trade as unenforceable, with narrow exceptions (notably the sale of a business and its goodwill, and certain partnership situations). Restraints that apply only during employment, and genuine confidentiality and non-solicitation protections, are treated differently and have more room.

• United States. Enforceability varies by state. Some states, including California, largely ban employee non-competes; others enforce reasonable ones. A federal rule to ban most non-competes was issued and then challenged in court, so the position keeps moving. Check your state and the current federal position.
• United Kingdom and many others. A non-compete can be enforced only so far as it is reasonable to protect a legitimate business interest, and no wider. So this template is most reliable for the sale-of-business situation and as a starting point where employee non-competes are allowed. Where they are not, a confidentiality agreement and a non-solicitation clause usually do the real work. This is general information, not legal advice. Have a qualified lawyer in your jurisdiction confirm whether a non-compete is enforceable for your situation before you rely on one. ## The template ``` NON-COMPETE AGREEMENT This Agreement is made on [date] between: (1) [Company legal name], of [address] (the "Company"); and (2) [Covenantor name], of [address] (the "Covenantor"). RECITALS The Covenantor is [an employee of / a consultant to / the seller of the business of] the Company and will have access to the Company's confidential information, customers, and goodwill. In consideration of [the employment / the consideration paid for the business / the sum of INR ____ ], the Covenantor agrees as follows. 1. RESTRICTED ACTIVITY During the Restricted Period, the Covenantor shall not, within the Restricted Area, directly or indirectly carry on or be engaged in a business that competes with the Company's business of [describe the specific business, narrowly]. 2. RESTRICTED PERIOD [e.g. 12 months] from the date the Covenantor's engagement ends [or from completion of the sale]. 3. RESTRICTED AREA [describe a defined, reasonable territory, e.g. the cities/states where the Company actually operates]. A worldwide restriction is unlikely to be reasonable. 4. NON-SOLICITATION During the Restricted Period, the Covenantor shall not solicit the Company's customers or employees with whom they dealt in the [12] months before leaving. 5. CONFIDENTIALITY The Covenantor shall keep the Company's confidential information secret and use it only for the Company, during and after the engagement. 6. CARVE-OUTS This Agreement does not prevent the Covenantor from: (a) holding up to [1%] of a listed company's shares as an investment; (b) using general skills and knowledge lawfully acquired; or (c) any act that cannot lawfully be restricted. 7. CONSIDERATION The Covenantor acknowledges receipt of [specify the money, benefit, or payment given in exchange for these restrictions]. 8. SEVERABILITY If any restriction is found unreasonable, the parties intend that it be read down to the extent needed to make it enforceable, and the rest remains in force. 9. GOVERNING LAW This Agreement is governed by the laws of [jurisdiction], and the courts of [place] have jurisdiction. Signed for the Company: ____________ Signed by the Covenantor: ____________ Name / title / date Name / date

2. **Restricted activity (clause 1).** Describe the actual competing business narrowly. A clause that bars any work in a whole industry is usually too wide.
3. **Restricted period (clause 2).** Keep it short. For employees, periods beyond a year are often struck down even where non-competes are allowed. For a business sale, a longer period tied to the goodwill protected can be reasonable.
4. **Restricted area (clause 3).** Tie it to where the Company really operates. Avoid worldwide or nationwide blanket terms unless the business genuinely is that wide.
5. **Consideration (clause 7).** A restriction needs something real given in exchange. For a sale it is the purchase price. For an employee, continued employment alone may not be enough in some places, so specify the payment or benefit.
6. **Lean on confidentiality and non-solicit.** Clauses 4 and 5 often protect the business even where clause 1 will not be enforced, so draft them carefully.
7. **Governing law (clause 9).** Pick the law of the place where the person actually works or where the business sits. You cannot usually choose a friendlier law to dodge local protections for workers. ## Enforceability at a glance | Situation | Typical position |
|-----------|------------------|
| Sale of business and goodwill | Reasonable restraints often allowed |
| Restraint during employment | Usually allowed if reasonable |
| Post-employment non-compete (India) | Generally void |
| Post-employment non-compete (US) | Varies by state; some ban it |
| Post-employment non-compete (UK and others) | Only if reasonable and no wider than needed |
| Confidentiality and non-solicit | Far more widely enforceable | ## Where a contract workspace helps Drafting a non-compete that is narrow enough to hold, checking it against the rules where the person actually works, and then remembering when the restricted period ends is slow, careful work by hand. That is the work an AI contract workspace can carry. Instead of copying a template and hoping the scope is reasonable, you generate the agreement from a short brief, see each restriction marked favourable, neutral, or unfavourable to your company, tighten the period or territory in plain English, and let the workspace track the end date. [Adira](https://adiralaw.com) is one such workspace, keeping drafting, per-clause risk, version history, and date tracking in one place and tuned to how your company contracts. The template above works on its own; a workspace just makes the drafting and the remembering less manual. Keep it narrow, give real consideration, and confirm it is enforceable where the person works before you rely on it.