NON- COMPETE CLAUSES DURING AND POST-TERMINATION OF AGREEMENT

AUTHOR – AKSHITA SHARMA, STUDENT AT SYMBIOSIS LAW SCHOOL, PUNE

BEST CITATION – AKSHITA SHARMA, NON- COMPETE CLAUSES DURING AND POST-TERMINATION OF AGREEMENT, ILE LABOUR LAW REVIEW, 3 (1) OF 2024, PG. 21-25, APIS – 3920 – 0009 | ISSN – 2583-6161.

INTRODUCTION

A non-compete clause prevents a person from starting a new business, taking up employment, or engaging with a competing entity. “Such clauses have long been controversial, as they conflict with Section 27 of the Indian Contract Act, 1872,which declares that any agreement restricting a person from pursuing a lawful profession, trade, or business is void, except in cases where goodwill has been sold.”^[1] It can be seen that “Sections 54 and 55 of the Indian Partnership Act, 1932, validate reasonable restrictions on partners from engaging in similar businesses upon dissolution or following the sale of goodwill.” ^[2]

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[1] “The Indian Contract Act, 1872, (§) 27, No. 9, Acts of Parliament, 1872 (India).”

[2] “The Indian Partnership Act, 1932, (§) 27, No. 9, Acts of Parliament, 1932 (India).”