Non-Compete/Non-Disclosure Agreement for United Kingdom

What's prohibited

• Non-compete restrictions that are wider than necessary to protect legitimate interests

  English courts will not enforce a restrictive covenant that goes beyond what is reasonably necessary to protect a legitimate business interest. A restriction that is too broad in geographic scope, duration, or activity prohibited will be struck down as an unreasonable restraint of trade (Herbert Morris Ltd v Saxelby [1916] AC 688). UK courts do not rewrite overly broad restrictions, they either enforce or strike them down (subject to severance per Tillman v Egon Zehnder [2019] UKSC 32).

• Penalty clause for breach of non-compete

  A clause imposing a fixed sum for breach that is extravagant or unconscionable in comparison to the greatest loss that could conceivably follow from breach is an unenforceable penalty (Cavendish Square Holding BV v Makdessi [2015] UKSC 67). Pre-estimate of damages (liquidated damages) is permissible, but must be a genuine pre-estimate, not punitive.

Other contracts for United Kingdom