Non-Compete
A non-compete clause is used to state that one party agrees not to start a similar business in competition against another party.
In a website sale, a non-compete clause is usually included in the final website purchase agreement to prevent the seller from quickly setting up another similar website to compete with the website that the buyer acquired from the seller.
Because of the global nature of an Internet business over a traditional regional business, in website sales, global non-compete clauses are usually enforced. Thus, the website seller is not legally permitted to set up a competing website in any country in the world. Most non-compete clauses are not lifetime clauses and often have a duration of anywhere from 2 to 7 years. The specific terms are negotiated and agreed to by both parties.
Author: Kris Tabetando
Kris Tabetando provides mergers & acquisitions (M&A) advisory and brokerage services to Internet companies. He also partners with investors to acquire & manage Internet businesses.
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