Is non-compete agreement and service bond applicable - india

Non Compete: It may hold good till employee is in employment of your company.

The Indian Contract Act, 1872, which provides a framework of rules and regulations, governing the formation and performance of a contract in India deals with the legality of such non-compete covenants. It stipulates that an agreement, which restrains anyone from carrying on a lawful profession, trade or business, is void to that extent. Under section 27 of the Indian Contract Act, 1872 agreements in restraint of trade are void.

Indian courts have consistently refused to enforce post-termination non-compete clauses in employment contracts, viewing them as "restraint of trade" impermissible under Section 27 of the Indian Contract Act, 1872, and as void and against public policy because of their potential to deprive an individual of his or her fundamental right to earn a livelihood.

Non Disclosure, Service Agreement, Bond etc:

The employer can and employer does insert clauses in appointment letter, create need specific agreement/bonds. The enforceability shall depend on the merits and circumstances. The amounts expressed in the bond/agreement/clause are the max. limit and the courts may decide the reasonable amount if matter lands up in court of law.

The legal consultants specializing in such matters can craft/draft agreements/bonds/clauses as per your needs.

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