What Is: Non-Solicitation 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 Information may not apply or be appropriate to your situation and/or may be out of date.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-Solicitation 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-solicitation agreement for use in the Province of Ontario.
This is based on my many years experience as a business lawyer in Ontario advising and preparing non-solicitation agreements for small and medium sized companies.
A non-solicitation agreement is an agreement between two parties that imposes a restriction to not solicit the interests of one of the parties.
The non-solicitation can refer to non-solicitation of customers or employees.
As such, non-solicitation agreements are often found in various scenarios including:
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a purchase and sale of a business
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employer-employee situations
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the company hiring an independent contractor
The non-solicitation restriction in the agreement usually outlines three factors:
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the scope of the restriction
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the territory of the restriction
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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-solicitation agreement whereby I agree as follows:
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I will not solicit the customers or employees of my former business to either do business with me or work for me in the case of an employee.
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within 5 kilometers of my location.
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for a period of one year from the sale date.
So there you have it.
That's just an overview of a non-solicitation agreement.
There is usually a lot more detail.
Every non-solicitation 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-solicitation agreement is combined with a non-competition agreement and also confidentiality restrictions.