This Non-Compete For Independent Contractors agreement is essential for businesses in South Africa engaging independent contractors who will have access to sensitive information, trade secrets, or valuable client relationships. The document is designed to protect legitimate business interests while adhering to South African constitutional principles and common law requirements regarding restraint of trade. It should be used when engaging contractors in roles where they could potentially compete with the business post-engagement. The agreement includes carefully drafted provisions on geographical scope, duration, and prohibited activities, ensuring enforceability under South African law while balancing the contractor's constitutional right to trade. Key considerations include the reasonableness of restrictions, legitimate business interests, and clear differentiation from employment relationships.
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1. Parties: Identification of the contracting parties - the company and the independent contractor
2. Background: Context of the agreement, nature of the business relationship, and legitimate business interests being protected
3. Definitions: Key terms including Confidential Information, Restricted Business, Territory, Restricted Period, and Restricted Customers
4. Independent Contractor Status: Clear declaration of independent contractor relationship and distinction from employment
5. Scope of Restraint: Detailed description of restricted activities, including competing business activities and customer solicitation
6. Duration of Restraint: Time period for which the non-compete obligations will be effective
7. Geographical Area: Specific definition of the territorial scope of the restraint
8. Confidentiality Obligations: Protection of confidential information and trade secrets
9. Acknowledgments: Contractor's acknowledgment of reasonableness of restrictions and receipt of sufficient consideration
10. Breach and Remedies: Consequences of breach and available remedies including injunctive relief
11. General Provisions: Standard clauses including governing law, jurisdiction, and severability
1. Non-Solicitation of Employees: Additional restriction on recruiting company employees, used when contractor has significant exposure to key staff
2. Intellectual Property Rights: Include when contractor may create or have access to IP during the engagement
3. Garden Leave: Optional provision for paid non-compete period, used in high-risk situations
4. Training and Trade Secrets: Include when contractor receives specialized training or access to valuable trade secrets
5. Customer Relationship Provisions: Detailed provisions about customer relationships when contractor has significant customer contact
6. Consideration: Specific section on compensation for the restraint, required in cases where separate consideration is provided
1. Schedule 1 - Restricted Territory: Detailed map or list of geographical areas covered by the restraint
2. Schedule 2 - Restricted Customers: List of specific customers or customer categories covered by the restraint
3. Schedule 3 - Restricted Business Activities: Detailed description of prohibited business activities
4. Schedule 4 - Confidential Information: Specific categories of confidential information covered by the agreement
5. Appendix A - Consideration Details: Details of any specific consideration provided for the restraint obligations
6. Appendix B - Contractor Services: Description of services provided by the contractor to establish context of restrictions
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