Restriction on sub contractor
This query is : Resolved
Quick Summary
Deepak Rawat
(Querist)
23 July 2021
Good Morning Member.
Please give legal advice on below mentioned case.
Company A want to make legal agreement with its Sub contractor for not to doing business with their client directly or indirectly for next 5 years. In the breach of the above said agreement, contractor will be liable to pay a fix amount as penalty.
Here, I want to know can a company make such agreement or this agreement will be void on the ground abstain from doing business.
Please give your valuable legal advice.
Thanks
Please give legal advice on below mentioned case.
Company A want to make legal agreement with its Sub contractor for not to doing business with their client directly or indirectly for next 5 years. In the breach of the above said agreement, contractor will be liable to pay a fix amount as penalty.
Here, I want to know can a company make such agreement or this agreement will be void on the ground abstain from doing business.
Please give your valuable legal advice.
Thanks
CA R SEETHARAMAN
(Expert)
23 July 2021
Such agreement is legally valid. It's not restricting doing business with other than company A's clients.
Message likes :
1 times
25 July 2021
This type of agreement is called non compete agreement and even charging / paying non compete fee is also allowed.
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