Definition of Non-Competition Agreement

A "non-competition agreement" is a contract between one party who agrees not to compete with the business of the other party for a specified term and on specified conditions. For example, the buyer of a business may insist that the seller of the business agree not to start a new business or take actions that would be competitive with the business sold. Also, non-competition agreements are sometimes entered into between an employer and employee, providing that upon the employee terminating employment, the employee can not compete in certain specified ways with the employer over a defined geographic area and time period. However, state law may limit or eliminate the enforceability of such an employee non-competition agreement. A sample non-competition agreement can be found at www.LegalAgreements.com.