Subcontractor Non-Compete Agreement Template

Key Elements to Include

A well-crafted subcontractor non-compete agreement is a vital tool for protecting a company’s proprietary information and business interests. By outlining specific restrictions on the subcontractor’s post-engagement activities, these agreements help to maintain a competitive edge and prevent the disclosure of confidential information.

1. Identification of Parties

Clearly state the names and addresses of both the company (principal) and the subcontractor.

Specify the legal status of each party (e.g., corporation, sole proprietorship).

2. Definition of Confidential Information

Define the scope of confidential information that the subcontractor is prohibited from disclosing or using.

Include examples of confidential information, such as trade secrets, customer lists, proprietary technology, and financial data.

3. Non-Compete Restrictions

Clearly outline the geographic area and duration of the non-compete restrictions.

Specify the types of activities that the subcontractor is prohibited from engaging in after the termination of the agreement.

4. Non-Solicitation Restrictions

Prohibit the subcontractor from soliciting the principal’s customers, employees, or other business relationships during and after the term of the agreement.

5. Ownership of Intellectual Property

Clarify ownership rights to any intellectual property created by the subcontractor during the course of the engagement.

Specify whether the subcontractor will assign ownership rights to the principal or retain certain rights.

6. Confidentiality Obligations

Require the subcontractor to maintain the confidentiality of all confidential information received from the principal.

Impose reasonable security measures to protect the confidentiality of such information.

7. Survival Clause

Ensure that the non-compete and confidentiality provisions survive the termination of the agreement.

Specify the duration of the survival period.

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8. Dispute Resolution

Include a clause specifying the method for resolving disputes arising under the agreement.

Consider options such as mediation, arbitration, or litigation.

9. Governing Law and Jurisdiction

Specify the governing law that will apply to the agreement.

Indicate the jurisdiction in which any legal action arising under the agreement must be brought.

10. Entire Agreement

State that the agreement constitutes the entire understanding between the parties and supersedes any prior or contemporaneous communications.

11. Counterparts

Allow for the execution of the agreement in multiple counterparts, each of which shall be deemed an original.

12. Severability

Provide that if any provision of the agreement is found to be invalid or unenforceable, the remaining provisions shall remain in full force and effect.

13. Notices

Specify the addresses to which notices should be sent.

Additional Considerations

Reasonableness: Ensure that the non-compete restrictions are reasonable in terms of scope, duration, and geographic area.

Consideration: Provide adequate consideration to support the enforceability of the non-compete agreement.

Consult with an Attorney: Seek legal advice from an attorney experienced in drafting non-compete agreements to ensure that the document is legally sound and enforceable.

By carefully addressing these key elements and considering the additional factors outlined above, you can create a comprehensive subcontractor non-compete agreement that effectively protects your company’s interests.