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Mutual Non Compete Agreement for Hong Kong

Mutual Non Compete Agreement Template for Hong Kong

A Mutual Non-Compete Agreement under Hong Kong law is a bilateral contract where two parties agree not to compete with each other's businesses within specified parameters. The agreement establishes reciprocal obligations regarding competitive activities, typically defining restricted business activities, geographical limitations, and temporal scope. Subject to Hong Kong's common law principles, the agreement must be reasonable in its restrictions and necessary to protect legitimate business interests. It includes provisions for confidentiality, enforcement mechanisms, and remedies for breach, while ensuring compliance with Hong Kong's Competition Ordinance and relevant legislation.

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What is a Mutual Non Compete Agreement?

This Mutual Non-Compete Agreement is designed for use in situations where two business entities in Hong Kong wish to establish reciprocal restrictions on competitive activities, typically in the context of a business collaboration, joint venture, or strategic partnership. The document outlines specific prohibited activities, geographical boundaries, and time periods for the restrictions, ensuring compliance with Hong Kong's legal framework which requires such restrictions to be reasonable and necessary for protecting legitimate business interests. It incorporates essential provisions for enforcement, remedies, and confidentiality while accounting for Hong Kong's Competition Ordinance and common law principles. The agreement is particularly relevant when parties are sharing sensitive business information or entering into strategic business relationships where mutual protection from competition is crucial.

What sections should be included in a Mutual Non Compete Agreement?

1. Parties: Identification and details of all parties entering into the agreement

2. Background: Context of the agreement, including the business relationship between the parties and reasons for entering into the non-compete arrangement

3. Definitions: Key terms used throughout the agreement, including 'Competitive Business', 'Restricted Period', 'Territory', and 'Confidential Information'

4. Mutual Non-Compete Obligations: Core section detailing the reciprocal obligations of each party to not compete, including scope of restricted activities

5. Duration and Territory: Specific timeframe and geographical scope of the non-compete obligations

6. Confidentiality Obligations: Provisions regarding the protection and non-disclosure of confidential information

7. Exceptions and Permitted Activities: Activities that are explicitly allowed despite the non-compete restrictions

8. Remedies and Enforcement: Legal remedies available in case of breach, including injunctive relief and damages

9. General Provisions: Standard clauses including governing law, jurisdiction, entire agreement, and severability

What sections are optional to include in a Mutual Non Compete Agreement?

1. Non-Solicitation: Additional restrictions on soliciting employees, customers, or suppliers - included when parties want to protect against indirect competition

2. Assignment and Successors: Provisions for transferability of the agreement - included when parties anticipate potential corporate restructuring or sale

3. Monitoring and Compliance: Procedures for monitoring compliance - included for complex business relationships requiring regular oversight

4. Exit Provisions: Procedures for early termination - included when parties want flexibility to end restrictions under certain conditions

5. Consideration: Specific section detailing the consideration provided - included when there is a separate payment or benefit for the non-compete obligations

What schedules should be included in a Mutual Non Compete Agreement?

1. Schedule 1 - Restricted Business Activities: Detailed list of specific business activities that are restricted under the agreement

2. Schedule 2 - Territorial Scope: Detailed description or map of geographical areas where restrictions apply

3. Schedule 3 - Competitive Entities: List of specific competitors or types of entities with whom engagement is restricted

4. Schedule 4 - Existing Commitments: List of pre-existing business relationships or commitments that are excluded from restrictions

5. Schedule 5 - Consideration Details: If applicable, detailed breakdown of any consideration or payment terms

Authors

Alex Denne

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

Jurisdiction

Hong Kong

Publisher

Ƶ

Document Type

Agreement Contract

Cost

Free to use
Relevant legal definitions
































Clauses






























Relevant Industries

Technology and Software

Financial Services

Professional Services

Manufacturing

Trading and Distribution

Healthcare and Pharmaceuticals

Consulting

Research and Development

Retail and E-commerce

Media and Entertainment

Telecommunications

Industrial Services

Relevant Teams

Legal

Corporate Development

Business Development

Executive Management

Commercial Operations

Strategic Planning

Mergers and Acquisitions

Compliance

Risk Management

Corporate Strategy

Relevant Roles

Chief Executive Officer

Managing Director

Business Development Director

Legal Counsel

Chief Legal Officer

Commercial Director

Chief Operating Officer

Partnership Director

Strategic Alliance Manager

Head of Business Strategy

Chief Commercial Officer

General Counsel

Corporate Development Manager

Joint Venture 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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