The Deed of Non Competition is a crucial legal instrument in Philippine business practice, designed to protect legitimate business interests while ensuring compliance with local laws and regulations. It is commonly used in employment terminations, business sales, partnership dissolutions, or when engaging key personnel with access to sensitive information. The deed must carefully balance the protection of business interests against constitutional rights to trade and employment, requiring specific attention to reasonableness in terms of duration, geographical scope, and restricted activities. Under Philippine law, non-compete provisions must be supported by adequate consideration and must not constitute an unreasonable restraint of trade. This document is particularly important in scenarios involving senior executives, technical experts, or business owners where protection of trade secrets, customer relationships, and competitive advantage is paramount.
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1. Parties: Identification of all parties to the deed, including full legal names and addresses
2. Background: Context of the agreement, relationship between parties, and basis for the non-compete obligations
3. Definitions: Detailed definitions of key terms used throughout the deed, including 'Restricted Business', 'Territory', and 'Restricted Period'
4. Non-Competition Obligations: Core restrictions and specific activities prohibited during the restricted period
5. Duration and Territory: Specific timeframe and geographical scope of the non-compete restrictions
6. Consideration: Details of the consideration provided in exchange for the non-compete obligations
7. Acknowledgments: Parties' acknowledgments regarding reasonableness of restrictions and independent legal advice
8. Remedies: Available remedies in case of breach, including injunctive relief and damages
9. Severability: Provisions for severing invalid clauses while maintaining the remainder of the agreement
10. Governing Law and Jurisdiction: Specification of Philippine law as governing law and jurisdiction for disputes
11. Execution: Formal execution provisions and signature blocks
1. Confidential Information: Additional provisions protecting confidential information, used when the non-compete involves access to sensitive business information
2. Intellectual Property Protection: Specific provisions regarding IP rights, used when the restricted business involves intellectual property
3. Garden Leave: Provisions for paid leave during notice period, used in employment-related non-compete situations
4. Non-Solicitation: Additional restrictions on soliciting employees, customers, or suppliers, used when business relationships need protection
5. Assignment Rights: Rights to assign the agreement to third parties, used in corporate transactions
6. Survival Clause: Provisions specifying which obligations survive termination, used in complex business relationships
1. Schedule 1 - Restricted Territory: Detailed description and/or maps of the geographical areas covered by the restrictions
2. Schedule 2 - Restricted Business Activities: Comprehensive list of specific business activities covered by the non-compete
3. Schedule 3 - Consideration Details: Detailed breakdown of consideration, payment terms, and conditions
4. Appendix A - Related Companies: List of affiliated companies or subsidiaries covered by the restrictions
5. Appendix B - Competitor List: If applicable, specific list of competitor companies or business types
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