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Sale of a Business Non-Compete Agreement

Updated on March 3rd, 2023

A sale of a business non-compete agreement protects a buyer so that the seller cannot re-open a similar business offering the same services in the market area. This type of non-compete is enforceable in all 50 states and is favorably viewed by the courts versus other types. The purchase price of the business will serve as consideration for the non-compete.


  • Consideration. Language that states the sales price will be the consideration;
  • Scope of Work. Outline prohibited professions and services the seller is prohibited from working;
  • Duration. Must be for a specific timeframe; and
  • Jurisdiction. A geographical area must be mentioned.

Non-Compete Clause (business purchase)

Non-Compete. The Seller shall be prohibited from participating in the activities of [SCOPE OF WORK] for a duration of [TIME PERIOD] after the sale of the business. The aforementioned restraint shall be for the geographical area of [JURISDICTION] with the Buyer’s payment of the sales price to act as consideration.


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I. THE PARTIES. This Sale of a Business Non-Compete Agreement (“Agreement”) made this [DATE] is made between:

Buyer: [BUYER’S NAME] (“Buyer”) with a mailing address of [MAILING ADDRESS], and

Seller: [SELLER’S NAME], (“Seller”) with a mailing address of [MAILING ADDRESS].

This Agreement is for the purpose of selling a business in order to protect the legitimate business interests of the Buyer.

II. CONSIDERATION. In exchange for the non-compete, the Seller shall receive the sales price for the business entity which shall also be deemed as consideration for this Agreement.

III. NON-COMPETE. The Seller shall be prohibited from participating in the following businesses, services, and industries: [NON-COMPETE]

IV. TERM. The Seller shall be bound to the Agreement for: [START AND END PERIODS]

V. GEOGRAPHICAL LIMITS. The Seller shall be bound to the non-compete within the following areas: [GEOGRAPHICAL AREAS]

VI. NON-SOLICITATION. The Seller shall be prohibited from engaging with all employees and customers of the Buyer during the term of this Agreement.

VII. CONFIDENTIAL INFORMATION. At no time during the term of this Agreement or after will the Seller be permitted to divulge, disclose, or use for their own benefit any information that is proprietary to the Buyer.

VIII. SEVERABILITY. If any provision of this Agreement is deemed to be invalid or unenforceable, the remainder of this Agreement shall be enforced to the maximum extent of the law.

IX. GOVERNING LAW. This Agreement shall be governed by and construed in accordance with the laws of the State of [GOVERNING LAW].

X. ENTIRE AGREEMENT. This Agreement represents the entire agreement between the Buyer and Seller and may only be modified by the signature of both parties hereto.

Buyer Signature: __________________________ Date: __________

Print Name: __________________________

Seller Signature: __________________________ Date: __________

Print Name: __________________________