Employment Contracts: Non-Competition Restrictions
Employment Contracts: Non-Competition Restrictions
Employment Contracts: Non-Competition Restrictions
Employment Contracts
Like any other contract in India, an employment contract also consists of the
following essential features- offer, acceptance, consideration, competent parties, legal
object and free consent.
Section 27 of the Contract Act has been applied in the context of (1) employer –
employee contracts, (2) contracts with partners, (3) dealer contracts and (4)
miscellaneous cases.
Section 3 of the Competition Act, 2000, states that agreements which are anti-
competitive in nature are banned. Thus, any non- poaching agreement which is anti-
competitive in nature would be unlawful.
Conclusion
The employment contracts have come a long way in the modern industrial era. Any
agreement which is anti-competitive or any agreement which restrains the prospective
employee from practicing the profession of his choice or carrying out any trade
activity is unlawful as well as immoral. Reasonable restrictions in employment
contracts are valid and generally do not lead to any legal consequences. Thus, the
presence of employment contracts ensures that all the terms and conditions of
employment are specifically laid down and properly understood by both employer and
employee.