Non Compete Agreement Sale Of Business for New Zealand

Non Compete Agreement Sale Of Business Template for New Zealand

A comprehensive legal agreement under New Zealand law that restricts the seller of a business from competing with the sold business for a specified period and within a defined geographic area. The document protects the buyer's investment by preventing the seller from establishing a competing business, soliciting customers or employees, or using confidential information acquired during their ownership. It includes specific provisions on duration, territorial limits, scope of restricted activities, and remedies for breach, all crafted to ensure enforceability under New Zealand's restraint of trade principles.

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What is a Non Compete Agreement Sale Of Business?

The Non-Compete Agreement Sale Of Business is a crucial document in New Zealand business transactions that protects the buyer's investment by preventing unfair competition from the seller. It is typically used when selling a business where the seller's knowledge, relationships, or reputation could pose a significant competitive threat if they were to re-enter the same market. The agreement must comply with New Zealand's restraint of trade principles, requiring restrictions to be reasonable in duration, geographic scope, and protected activities. It includes detailed provisions on prohibited activities, enforcement mechanisms, and consequences of breach. This document is particularly important in situations where the business value significantly depends on customer relationships, trade secrets, or specialized knowledge that the seller possesses.

What sections should be included in a Non Compete Agreement Sale Of Business?

1. Parties: Identification of the seller (covenantor) and buyer (covenantee) of the business

2. Background: Context of the business sale and reason for the non-compete provisions

3. Definitions: Key terms including Business, Restricted Business, Territory, Restraint Period, Confidential Information

4. Non-Compete Obligations: Core restrictions on competing activities, including scope of prohibited activities

5. Geographic Restrictions: Definition of the territorial scope of the non-compete obligations

6. Duration of Restrictions: Timeframe for which the non-compete obligations will apply

7. Non-Solicitation Provisions: Restrictions on soliciting employees, customers, and suppliers

8. Confidentiality Obligations: Protection of confidential information and trade secrets

9. Acknowledgments: Acknowledgment of reasonableness of restrictions and receipt of consideration

10. Consideration: Details of the consideration provided for the non-compete obligations

11. Remedies: Available remedies in case of breach, including injunctive relief

12. General Provisions: Standard contract terms including governing law, notices, and interpretation

What sections are optional to include in a Non Compete Agreement Sale Of Business?

1. Assignment Rights: Rights to assign the agreement, particularly relevant if the buyer may want to sell the business in the future

2. Intellectual Property Protection: Additional provisions protecting IP rights, needed if the business has significant IP assets

3. Training and Transition: If the seller is providing any training or transition services to the buyer

4. Exceptions to Restrictions: Specific carved-out activities or investments that are permitted

5. Independent Contractor Provisions: Required if the seller will continue to provide services as a contractor

6. Shareholder Provisions: Needed if the seller retains any shareholding in the business

What schedules should be included in a Non Compete Agreement Sale Of Business?

1. Schedule 1 - Business Description: Detailed description of the business being sold and protected

2. Schedule 2 - Territory Map: Map or detailed description of the geographic territory covered

3. Schedule 3 - Restricted Activities: Comprehensive list of specific activities that are restricted

4. Schedule 4 - Key Customers and Suppliers: List of protected business relationships if applicable

5. Schedule 5 - Consideration Details: Breakdown of consideration specifically attributed to the non-compete

6. Appendix A - Deed of Adherence: Template deed for related parties who need to be bound by the restrictions

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

New Zealand

Publisher

Genie AI

Document Type

Sales Contract

Sector

Sales

Cost

Free to use
Relevant Industries

Professional Services

Retail

Manufacturing

Technology

Healthcare

Hospitality

Construction

Education

Financial Services

Consulting

Real Estate

Engineering

Distribution

Food and Beverage

Software Development

Relevant Teams

Legal

Corporate Development

Mergers & Acquisitions

Executive Leadership

Business Development

Finance

Risk Management

Compliance

Strategy

Operations

Relevant Roles

Business Owner

CEO

Managing Director

Legal Counsel

Corporate Lawyer

Business Development Manager

Chief Financial Officer

Company Secretary

Commercial Director

Operations Manager

Mergers & Acquisitions Manager

Business Broker

Franchise Manager

Strategy Director

Risk Manager

Industries
Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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