How to Draft a Non-Compete Clause
If you are looking to hire new contractors and want to prevent them from working on their own or taking your clients then you will be required to sign a non-compete clause. This is usually part of the hiring process for many businesses. Once agreeing to the terms and conditions, the contractor will be legally bound to work only for your business until he/she resigns. Although you can perform this task on your own, it is recommended to hire an attorney to draft a non-compete clause for you. Follow some simple tips to draft a non-compete clause to keep your business protected.
Instructions
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Before doing anything else you will need to decide whether you want to draft a non-compete clause on your own or hire an attorney to get this job done for you. Studies have shown that hiring an attorney can help you save valuable time and money in the long term. An attorney will charge you a fee to prepare the paperwork.
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Next, you will be required to choose the provisions you want to include in your non-compete clause to protect your business. For example, if your business includes selling of motor vehicle parts online then you should consider drafting a clause that prevents a contractor from going into the spare parts business on their own.
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Set up a meeting with your lawyer and determine what exactly you would like to add on your non-compete clause. Choose words carefully so the contract actually says what you want in clear terms. For instance, you may decide to write “The contractor shall not engage in any business that sells motor vehicle parts online while working for ABC Corporation over the next five years”. Including such information will help the contractor understand that he/she can only start his/her own business after resigning from ABC Corporation.
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Before drafting the non-compete clause on your own, consult an attorney experienced in business law who can advise you about the correct legal terms that must be used in the contract. You can also pay the attorney to just add on or finish drafting the non-compete clause for you.
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You may also choose to purchase a template of a non-compete clause from your local stationery store selling legal documents. Provide all the details and reword the form if you have to. Mail the complete draft to the contractor, requesting to sign and return it.
