What is a Non-Compete Clause?

A Non-Compete Clause is a contractual condition that restricts an employee or party from engaging in a similar trade, business, or profession that competes with the employer after the termination of employment. Its purpose is to protect business interests, confidential information, and trade secrets.

Section 27 of the Indian Contract Act, 1872, any agreement that restrains trade or profession is void to that extent, unless it falls under reasonable exceptions like during employment or the sale of goodwill.

Indian courts usually do not support post-employment non-compete clauses unless they are fair, necessary, and not against public interest.