Define: Noncompetition Agreement

An agreement, generally included in an employment contract or a contract for the sale of a business, where one party agrees not to compete with the other party for a specific period of time and within a particular area. Salespeople, for example, often sign noncompetition agreements that prevent them from using the contacts gained by one employer to benefit another employer. Or a salesperson may sign what is known as a “noncompete” agreeing not to sell within a particular area, or even work in the same type of business. In some US states, such as California, courts view noncompetition agreements with disfavour and will not enforce them unless the restrictions are very narrow. In other states, courts routinely uphold them.

This site contains general legal information but does not constitute professional legal advice for your particular situation. Persuing this glossary does not create an attorney-client or legal adviser relationship. If you have specific questions, please consult a qualified attorney licensed in your jurisdiction.

This glossary post was last updated: 29th March, 2024.