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Non-solicitation agreement

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An agreement to inhibit one party from soliciting business relationships with some defined class of other persons or businesses.

This is a non-solicitation agreement template. The purpose of a non-solicitation agreement is to prevent one or both parties from interfering in the business relationships of the other.

In the unilateral version of this document, the restrictions are placed on one party only; in the mutual version, they are placed on both parties.

Non-solicitation restrictions

There is a wide selection of optional and alternative restrictions in the agreement. These include prohibitions on:

  1. soliciting or doing business with relevant persons;
  2. seeking to become the employee or employer of any relevant person;
  3. setting up or forming a company in the relevant territory with any relevant person;
  4. soliciting any relevant person to leave or terminate its relationship with the first party;
  5. soliciting any relevant person to do anything which would breach the agreement; (vi) soliciting any relevant person to reveal confidential information of the first party; and
  6. interfering with any of the first party's business relationships so as to negatively affect the first party.

Other restrictions can be added as deemed necessary in the circumstances.

Other contractual provisions

The provisions do not restrict any dealings between the parties' associates if there has been no employment or other business relationship between the relevant party and the relevant associate for a defined period.

The indemnities given in the non-solicitation agreement provide cover for damages, losses, costs and expenses suffered or incurred by a party and arising as a result of a breach of contract by the other party.

Either party may terminate upon breach. Similarly, either party may terminate the agreement immediately if the other party is dissolved, stops trading, ceases to pay its bills, appoints a liquidator or has a winding-up order issued against it.

In the case of the unilateral non-solicitation agreement, there is an "consideration" clause: without it, the contract may be deemed unenforceable. The consideration can be nominal or substantial depending on the circumstances.

Restraints of trade and competition law

The restraints of trade doctrine can affect the enforceability of a non-solicitation agreement. Contractual provisions that amount to covenants in restraint of trade are prima facie unenforceable. They will usually only be enforced by the courts where they are reasonable with respect to the particular interests of the parties involved (although there are some exceptions).

In addition to the restraints of trade doctrine, UK and EU competition law may affect the enforceability and legality of a non-solicitation agreement. Non-solicitation agreements may amount to anti-competitive agreements under Chapter I of the Competition Act 1998 and/or Article 81 of the EC Treaty. A discussion of these areas of law is well beyond the scope of this note. You can find out more about UK and EU competition law on the OFT website at Where competition law issues may arise, you should take specialist legal advice.

  1. Definitions
  2. Term
  3. Non-solicitation: restrictions on First Party (mutual version only)
  4. Non-solicitation: restrictions on Second Party
  5. Warranties
  6. Indemnities
  7. Termination
  8. Effects of termination
  9. Notices
  10. General
  11. Interpretation

Unilateral agreement statistics

  • Total words: 3313
  • Total characters: 20890
  • Document pages (approx.): 5
  • Guidance notes pages (approx.): 5
  • Total pages (approx., including cover): 11

Mutual agreement statistics

  • Total words: 4139
  • Total characters: 26200
  • Document pages (approx.): 7
  • Guidance notes pages (approx.): 7
  • Total pages (approx., including cover): 15

What type of restrictions are included in the mutual agreement?

There are six basic restrictions, although you may choose to use only a sub-set. Most of the restrictions are based around the idea of a "restricted associate" - that is, a person in respect of whom the restrictions apply. The restrictions are as follows.

First, either party or both may be restricted from soliciting or entering into any business contract, arrangement or dealings with a restricted associate. Second, either party or both may be restricted from becoming the employee or employer of a restricted associate. Third, either party or both may be prevented from setting up or forming a limited company, a partnership or another business concern with a restricted associate. Fourth, either party or both may be prevented from soliciting, enticing or procuring any restricted associate to leave the employment of the other party or terminate a commercial relationship with the other party. Fifth, either party or both may be restricted from soliciting, enticing or procuring the disclosure of the confidential information of the other party by a restricted associate. Sixth, there is a general restriction on interference with the business of the other party that may be placed on either party or both parties.

The restricted associates of one party may of course be different to the restricted associates of the other party.

All of these restrictions are subject to various limitations - for example as to the term of the restriction.

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