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The Non Competition Agreement Sale Of Business is essential in Canadian business acquisition transactions where protecting the purchased business's goodwill, customer relationships, and competitive position is crucial. This document is typically executed alongside the main purchase agreement and is designed to prevent the seller from establishing competing businesses or soliciting customers and employees for a reasonable period post-sale. It's particularly important in Canadian jurisdictions where courts scrutinize such agreements for reasonableness in terms of duration, geographic scope, and scope of restricted activities. The agreement must balance the legitimate interests of the buyer in protecting their investment while ensuring compliance with Canadian competition laws and common law principles. It's commonly used in various scenarios including small business sales, corporate acquisitions, and professional practice transfers, where maintaining business value post-sale is critical.

1. Parties: Identification of the seller (covenantor) and buyer (covenantee) including full legal names and business addresses

2. Background: Context of the agreement, including reference to the main business sale transaction and justification for the non-compete provisions

3. Definitions: Key terms including 'Business', 'Restricted Business', 'Territory', 'Restricted Period', and other relevant defined terms

4. Non-Competition Covenant: Core restrictions on competitive activities, including specific prohibited activities and business types

5. Geographic Scope: Clear definition of the territorial limits where restrictions apply

6. Duration: Specific timeframe for the non-compete obligations with clear start and end dates

7. Non-Solicitation of Customers: Restrictions on approaching or dealing with existing customers and specific customer groups

8. Non-Solicitation of Employees: Restrictions on hiring or attempting to hire employees of the business

9. Confidentiality: Obligations regarding confidential information and trade secrets

10. Acknowledgments: Seller's confirmation of the reasonableness of restrictions and receipt of consideration

11. Remedies: Available remedies for breach including injunctive relief and damages

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