Generally, a non-competition clause is inserted into a contract to prevent one party from competing
with another party. The first party has usually gained certain information from the second party or
the first party has sold this information to the second party for use in its business. Also known as a
non-compete clause. In the purchase and sale of business, a non-competition clause is used to
prevent the seller from competing with the purchaser in the same business area for a certain period
of time. In employment contracts, a non-competition clause is used to prevent an employee from
pursuing work in a similar profession or trade or starting a company in competition with its employer
during the employee's employment and for a certain time after the employment is terminated. In
confidentiality agreements, a non-competition clause is used to prevent a party that has been given
confidential information from using that information and competing with the second party in a
certain business in a specific geographical area for a certain time period.
