Restraint Of Trade Contracts


A restraint of trade clause is a legal contract that prevents the signee from doing business or trade with a specific person(s) mentioned in the agreement. It is used when an employee is leaving their position and the terms of the agreement are put forward by the employer. It is necessary to protect the confidentiality and the trade secrets of the firm.

What Is A Restraint Of Trade Agreement?

The restraint of trade agreement is a legally binding contract carried out when an employee resigns or terminates. This agreement prevents the former employee from doing business or trade with people as per terms of the contract. The different clauses included in the agreement will be discussed further.

The agreement prohibits the former employee from using the company’s confidential information or leads to gain profits. It also restricts in seeking employment under the competitor’s business for a certain period after removal and also restricts the previous employee from obtaining buyers, staff members, or any other resources from the company. Below are the typical terms included in the restraint of trade clause. However, the employer may introduce terms to meet the requirements of his/hers company’s policy.

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Types Of Restraint Of Trade Clauses

Restraint of trade contracts usually consists of terms that prevent the former employee from making trades or transactions with specific people or businesses as mentioned in the agreement. The different types of clauses are as follows:

Non-compete clauses prevent an ex-worker of a business from working under a competitor’s firm or starting a private business in the same market as a competitor. After this temporary restraint, the ex-worker can continue to work according to his/her will.

The non-compete clause protects the confidential information and trade secrets of the firm. It also prevents the former employee from taking advantage of their new position. This agreement takes away any leverage they might have had against the company. Including this term in the agreement ensures the safety of the business after that employee has left.
Non-solicitation clauses protect the businesses from former employees trying to poach their clients, staff members, or other business personnel. They cannot influence the decision of any of the company’s business partners for their profit.

The non-solicitation clause prevents a party from obtaining the clients from the former employer’s business. It ensures the safety of the latter’s business dealings which otherwise would have taken damage due to the poaching of members from the business family. The ex-employee is entitled to the information acquired through his work but not allowed to use it for a trade if it will incur a loss to the previous company.

Get Legal Help With Commercial Lawyers In Perth

Get Legal Help With Commercial Lawyers In Perth


Restraint of trade agreement lawyers at Commercial Lawyer Perth have years of experience and will guide you throughout the process. Seeking legal help is beneficial to both parties as forming the agreement requires specific care and attention. The contract includes different clauses that prevent former employees from conducting business or trade with people mentioned in the clauses.

Commercial lawyers will assist you in defining the terms that outline the agreement. For an employer, the trade secrets of the firm must remain confidential. In terms of the employee, it is crucial to check that he/she is not wrongfully restrained from doing any transaction or activity. The lawyers will thoroughly examine the contract and make sure you get the best outcome possible. Hiring legal help will make the flow of the process smooth and convenient.

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