What Is: Non-Competition Agreement in Ontario, Canada

NOTICE: The information in this video is intended only to be merely informative and is NOT intended to be legal advice to any person, company or entity. Never rely solely on the information contained in this video. Information may not apply or be appropriate to your situation and/or may be out of date. Any person with a specific legal question or legal problem should always consult with and seek the advice of a qualified lawyer. Peter Cusimano is a licenced member (lawyer) of the Law Society of Ontario. All legal services will be provided by a licenced lawyer. Not intended to solicit anyone who is represented by a lawyer or paralegal. E.&O.E. (c) 2018-2024 Peter Cusimano, www.PeterCusimano.com


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Video Transcript

What Is: Non-Competition Agreement in Ontario, Canada
by: Peter A. Cusimano, B.Sc., LL.B.; Toronto Business Lawyer

In this video, I am going to share some general information about a non-competition agreement for use in the Province of Ontario.

This is based on my twenty plus years experience as a business lawyer in Ontario advising and preparing non-competition agreements for small and medium sized companies.

A non-competition agreement is an agreement between two parties that imposes a restriction to not compete in a certain activity to protect the interests of one of the parties.

Non-competition agreements are often found in various scenarios including:

  1. a purchase and sale of a business

  2. an employer-employee situation

The non-competition restriction in the agreement usually focuses on three factors:

  1. the scope of the restriction

  2. the territory of the restriction

  3. the time period of the restriction

For example, if I operate a service business and I sell my business to a buyer, I may agree to a non-competition agreement whereby I agree as follows:

  1. I will not provide the services of my former business

  2. within 5 kilometers of my location

  3. for a period of one year from the sale date

So there you have it.

That's just an overview of a non-competition agreement.

There is usually a lot more detail.

Every non-competition agreement will need to be carefully written to deal with the specifics of the business, otherwise the agreement may be non-enforceable even if it is signed by the other party.

Often a non-competition agreement is combined with a non-solicitation and confidentiality restrictions.