What is a Supplier Non-Compete Agreement?

A supplier non-compete agreement, also known as a non-competition clause, is a type of contract used by companies to protect their investments and confidential information. The agreement prevents suppliers from competing against the company or sharing any information related to the company’s activities with third parties.

Benefits of Supplier Non-Compete Agreements

Having a supplier non-compete agreement in place can provide numerous benefits to a company. It can help protect your company’s confidential information and trade secrets, and prevent suppliers from taking advantage of any special knowledge they gain while working with the company. Additionally, it can prevent suppliers from unfairly competing with the company by using the same products or services.

What Should Be Included in a Supplier Non-Compete Agreement?

When creating a supplier non-compete agreement, it is important to make sure that all of the necessary elements are included. Generally, the agreement should include provisions that define what the supplier is prohibited from doing, such as competing with the company or disclosing confidential information. It should also include the duration of the agreement, the geographical area covered by the agreement, and any other relevant terms and conditions.

Considerations When Drafting a Supplier Non-Compete Agreement

When drafting a supplier non-compete agreement, there are a few key considerations to keep in mind. First, the agreement should be reasonable in scope, meaning that it should not be overly broad or restrictive. Additionally, it should be written in plain language that is easy to understand. Finally, it is important to make sure that the agreement is legally enforceable in the jurisdiction in which it is used.

Conclusion

A supplier non-compete agreement can be a valuable tool for protecting a company’s investments and confidential information. When creating such an agreement, it is important to make sure that it is reasonable in scope, written in plain language, and legally enforceable. By taking the time to draft a comprehensive and enforceable agreement, companies can ensure that their investments and confidential information are adequately protected.