The Business Non-Compete Agreement is a crucial legal instrument in Indonesian business relationships where one party seeks to protect its legitimate business interests by preventing another party from engaging in competitive activities. This document is typically used when engaging key employees, business partners, or in business sale transactions where the seller must be restricted from competing with the sold business. The agreement must be carefully drafted to comply with Indonesian legal requirements, including the Civil Code, Labor Law No. 13 of 2003, and competition regulations. Key considerations include providing fair compensation, setting reasonable time and geographical restrictions, and specifically defining prohibited activities. The document should balance the protection of legitimate business interests with constitutional rights to work and earn a livelihood under Indonesian law.
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1. Parties: Identifies and provides full details of all parties to the agreement
2. Background: Sets out the context and purpose of the agreement, including the business relationship between the parties
3. Definitions: Defines key terms used throughout the agreement, including 'Competitive Business', 'Confidential Information', and 'Restricted Territory'
4. Non-Compete Obligations: Details the specific competitive activities that are prohibited, including scope of restrictions
5. Duration and Territory: Specifies the time period and geographical area where the non-compete obligations apply
6. Consideration: States the compensation or benefits provided in exchange for the non-compete obligations
7. Confidentiality Obligations: Outlines obligations regarding the protection of confidential information and trade secrets
8. Acknowledgments: Contains party acknowledgments about the reasonableness of restrictions and receipt of consideration
9. Remedies: Specifies available remedies in case of breach, including injunctive relief and damages
10. General Provisions: Standard clauses covering amendments, notices, governing law, etc.
1. Non-Solicitation: Additional restrictions on soliciting employees, customers, or suppliers - used when business relationships need specific protection
2. Garden Leave: Provisions for paid leave during notice period - used for senior employees or when immediate competition risk is high
3. Training and Investment: Details of specific training or investments made in the restricted party - used to justify non-compete restrictions
4. Monitoring and Reporting: Requirements for the restricted party to report activities - used for high-risk situations or senior employees
5. Exit Procedures: Specific procedures upon termination of business relationship - used for complex business relationships
6. Severability and Reformation: Provisions allowing court modification of unenforceable terms - used in jurisdictions where enforcement might be challenged
1. Schedule 1 - Restricted Activities: Detailed list of specific business activities that are prohibited
2. Schedule 2 - Restricted Territory: Detailed description or maps of geographical areas where restrictions apply
3. Schedule 3 - Compensation Details: Breakdown of consideration or compensation provided for the non-compete obligations
4. Schedule 4 - Confidential Information: Specific categories of confidential information covered by the agreement
5. Appendix A - Acknowledgment Form: Form for formal acknowledgment of obligations and receipt of consideration
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