Non-Compete Agreements Between Business Partners: A Sample Guide

When starting a business partnership, it is important to have certain agreements in place to protect the interests of all involved parties. One such agreement is the non-compete agreement, which prevents the partners from competing against each other during and after the partnership`s term.

A non-compete agreement is a legal document that outlines the terms of the agreement and the scope of the restrictions it imposes. A well-written non-compete agreement can help prevent disputes between partners and protect the business from competition.

Here is a sample non-compete agreement for business partners:

Non-Compete Agreement

This Non-Compete Agreement (the “Agreement”) is entered into on [date] by and between [Name of Partner 1] (“Partner 1”) and [Name of Partner 2] (“Partner 2”) (collectively referred to as the “Partners”).


WHEREAS, the Partners are currently in a business partnership (the “Partnership”); and

WHEREAS, the Partners recognize the importance of protecting the Partnership from competition and ensuring that the Partnership`s confidential information and trade secrets are not disclosed; and

WHEREAS, the Partners wish to enter into this Agreement to prevent any potential conflicts of interest that may arise during and after the Partnership`s term.


In consideration of the mutual promises and covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Partners agree as follows:

1. Restriction on Competition

During the term of the Partnership and for a period of [number] years after the termination of the Partnership, each Partner agrees not to directly or indirectly engage, participate, or invest in any business that is engaged in the same or similar business as the Partnership.

2. Confidentiality and Trade Secrets

The Partners acknowledge and agree that the Partnership`s confidential information and trade secrets are valuable and must be protected. Each Partner agrees not to disclose or use any of the Partnership`s confidential information or trade secrets for any purpose other than for the Partnership`s benefit.

3. Enforcement

The Partners acknowledge and agree that the restrictions contained in this Agreement are fair and reasonable. The Partners agree that any breach of this Agreement may result in irreparable harm to the Partnership and that, in addition to any other remedies available to the Partnership at law or in equity, the Partnership may seek injunctive relief to enforce the terms of this Agreement.

4. Governing Law and Venue

This Agreement shall be governed by and construed in accordance with the laws of [State/Country]. Any dispute arising under or in connection with this Agreement shall be resolved exclusively in the state or federal courts located in [City, State].

5. Severability

If any provision of this Agreement is held to be invalid or unenforceable, the remaining provisions shall remain in full force and effect.

6. Entire Agreement

This Agreement constitutes the entire understanding between the Partners concerning the subject matter hereof. This Agreement may not be amended, modified, or supplemented except in writing signed by both Partners.

IN WITNESS WHEREOF, the Partners have executed this Non-Compete Agreement as of the date first above written.

Partner 1: [Signature and Printed Name]

Partner 2: [Signature and Printed Name]


In conclusion, a non-compete agreement is an essential tool for protecting the interests of business partners. The sample agreement above provides a framework for drafting an effective agreement that addresses the key issues related to competition, confidentiality, and trade secrets. To ensure that the agreement is legally enforceable, it is recommended that partners consult with a legal professional before finalizing the agreement.