A non-compete agreement is a common contract clause. It can limit your ability to work with a client's competitors after your project ends.
What is Non-compete agreement?
A non-compete agreement is a contract clause where you agree not to compete with a client after your work ends. It typically restricts you from working with their direct competitors or starting a similar business. The restrictions are defined by geography, time period, and specific industry scope.
Why is this important?
For freelancers, this clause can significantly impact your future income and client options. Signing a broad non-compete can lock you out of your niche market. It's vital to understand what you're agreeing to protect your ability to earn a living.
How does it work?
In practice, a client includes this clause in your service contract. It becomes active when your project or contract ends. You must then avoid the prohibited activities, like working for named competitors, for the specified duration and within the defined geographic area.
Pros and cons
The pros include potentially securing long-term, trusting client relationships and protecting a client's trade secrets. The major cons are severely limiting your future work opportunities, and these clauses are often overly broad or unenforceable in many jurisdictions for freelancers.
Conclusion
Always review non-compete clauses carefully before signing. Negotiate for reasonable limits on time, geography, and scope to protect your business. When in doubt, seek legal advice to understand your local laws and rights.
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