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Non Compete Non Solicitation

Non Compete Non Solicitation

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Published by babyloushmoopey


Need a Legal Form? Check out DynamicLawyers.com's Legal Form + Video Guides! This is a sample of ONE OF TWO WRITTEN GUIDES that comes with this legal form. Each legal form is lawyer-prepared, customizable, AFFORDABLE and comes with:

- A FREE VIDEO TUTORIAL (watch an example of how to customize the legal form)

- A FREE WRITTEN GUIDE (read helpful information about this legal form)

- ANOTHER FREE WRITTEN GUIDE (entitled "Is My Legal Form Valid and Enforceable?")



Best of all, if you do need a lawyer to review your legal form after you've completed it, you can simply Make a Post and Get FREE INFORMATION AND QUOTES from Ontario Lawyers!.



Need a Legal Form? Check out DynamicLawyers.com's Legal Form + Video Guides! This is a sample of ONE OF TWO WRITTEN GUIDES that comes with this legal form. Each legal form is lawyer-prepared, customizable, AFFORDABLE and comes with:

- A FREE VIDEO TUTORIAL (watch an example of how to customize the legal form)

- A FREE WRITTEN GUIDE (read helpful information about this legal form)

- ANOTHER FREE WRITTEN GUIDE (entitled "Is My Legal Form Valid and Enforceable?")



Best of all, if you do need a lawyer to review your legal form after you've completed it, you can simply Make a Post and Get FREE INFORMATION AND QUOTES from Ontario Lawyers!.

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Published by: babyloushmoopey on Jul 12, 2010
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09/17/2013

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Michael Carabash
,
 
B.A., LL.B., J.D., M.B.A.
michael@carabashlaw.com
 
Need an Ontario Lawyer? Make a Post. Get FREE Quotes!www.DynamicLawyers.com 
Prepared By:
Page 1 of 24
 
Michael CarabashNon-Compete | Non-Solicitation Agreements in Ontario
DISCLAIMER: Please note that the information provided in this DL Guide is NOT legal advice and isprovided for educational purposes only. Laws are subject to change and without notice. This DL Guide maybe outdated. If you need legal advice with respect to drafting, revising, negotiating or resolving a disputeconcerning an non-compete or non-solicitation Agreement, you should seek professional assistance (e.g.make a post on Dynamic Lawyers
 
). We have Toronto, Ottawa, Hamilton, Brampton, Mississauga and otherOntario lawyers registered to help you. You can contact
Michael Carabash
Last Updated: June 2010© 2008-2010, Dynamic Lawyers Ltd. All Rights Reserved.
 
Michael Carabash
,
 
B.A., LL.B., J.D., M.B.A.
michael@carabashlaw.com
 
Need an Ontario Lawyer? Make a Post. Get FREE Quotes!www.DynamicLawyers.com 
 Non-Compete | Non-Solicitation Agreements in Ontario
 Page 2 of 24
Table of Contents
What are Restrictive Covenants? .................................................................................................................... 3What are Non-Compete and Non-Solicitation Clauses? ................................................................................ 3Are they valid and enforceable? ..................................................................................................................... 3Reasonableness: Duration, Geographic Scope, Activities, and Public Interest .............................................. 6Too Vague / Uncertain to be Enforceable .................................................................................................... 10Exceptional Circumstances ........................................................................................................................... 14Should I require both? .................................................................................................................................. 15When should Employees agree to Restrictive Covenants? .......................................................................... 15What if an Employee never signed an Agreement with Restrictive Covenants? ......................................... 17Restrictive Covenant Tips ............................................................................................................................ 19Basic Structure of the Non-Compete | Non Solicitation Agreement ............................................................ 21About Us ....................................................................................................................................................... 24 
 
Michael Carabash
,
 
B.A., LL.B., J.D., M.B.A.
michael@carabashlaw.com
 
Need an Ontario Lawyer? Make a Post. Get FREE Quotes!www.DynamicLawyers.com 
 Non-Compete | Non-Solicitation Agreements in Ontario
 Page 3 of 24
What are Restrictive Covenants?
Restrictive Covenants
are terms and conditions in an Agreement (such as an Employment, IndependentContractor, Shareholder, or Partnership Agreement) that limit one
 party’s ability to do certain things. Typical
examples include restrictions on the use and disclosure of confidential information as well as non-competeand non-solicitation clauses. The idea behind restrictive covenants is that a party which is privy to another
 party’s sensitive information or clients
should be prevented from simply leaving the relationship andcompeting with the other party with all those benefits.
What are Non-Compete and Non-Solicitation Clauses?
A
Non-Compete
 
clause
 
in an agreement
 puts limits on one party’s
ability to compete in the same businessas the other party. In other words, during the term of the agreement and for a period of time thereafter andwithin a set geographic area, one party cannot establish their own business or work for others such that theysell the same products or services as did their current or former client, employer, partner, etc. A
Non-Solicitation
 
clause in an agreement means that one party will not solicit (attempt or actually sell) customersor employees of the current or previous employer, client, or partner. This is a less drastic restrictive covenantthan a Non-Compete clause. While this DL Guide focuses on Non-Compete and Non-Solicitation clauses inthe employment context, they can also be found in business agreements (e.g. partnership agreement,shareholder agreement, independent contractor agreement, share or asset purchase agreement, etc.).
 Are they valid and enforceable?
Since restrictive covenants are contractual, the principles of contract law apply to their validity,interpretation, and enforceability. In Ontario, this means that the provision in an Agreement must be
clear
 and
certain
enough (i.e. not too vague or missing information) to be enforceable. Th
ere’s an age
-old rule of interpretation called contra-proferentum which states that, in the case of an ambiguity, the provision should
 be interpreted against the party who wrote it. Ouch! Don’t use wishy
-
washy language, such as ―may‖; usedefinitive language such as ―must‖ or ―shall‖. Finally, don’
t provide alternatives in the restrictive clauseitself 
 – 
 
for example ―the non compete clause may last 1, 2, or 3 years‖; this will make it unenforceable for 
vagueness.

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