What Is a Non-Compete Clause?

A non-compete clause is a clause in a contract which is either an employment contract or a contract between two parties that are doing business, where one party agrees not to engage in the same business as the other party for a certain period of time, within a certain geographical area, or within a certain business. Typically, those agreements are upheld if they are reasonable in scope, meaning reasonable in time, reasonable in geographic area, and reasonable to protect an interest of the party who is seeking to have the non-compete entered into by the other party.