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Vendor Non Compete Agreement

Vendor Non Compete Agreement Template for Malaysia

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Key Requirements PROMPT example:

Vendor Non Compete Agreement

"I need a Vendor Non-Compete Agreement under Malaysian law for a software development contractor who will have access to our proprietary technology and customer data, with a restriction period of 2 years within the Southeast Asian region."

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Document background
The Vendor Non-Compete Agreement is essential for businesses operating in Malaysia who need to protect their legitimate interests when engaging with vendors who may gain access to sensitive information or strategic knowledge. This document is particularly crucial when vendors provide critical services, have access to proprietary information, or could potentially leverage their relationship with the company to compete directly. The agreement must comply with Malaysian contract law and competition regulations, including the Contracts Act 1950 and Competition Act 2010. It typically includes specific restrictions on competitive activities, defined geographical boundaries, and reasonable time limitations. The document should be used when engaging with vendors in sensitive positions or those who could pose a competitive threat if they were to use their acquired knowledge or relationships against the company's interests.
Suggested Sections

1. Parties: Identifies and defines the contracting parties - the business entity and the vendor

2. Background: Explains the context of the relationship and the legitimate business interests being protected

3. Definitions: Defines key terms including 'Confidential Information', 'Competing Business', 'Restricted Period', 'Restricted Territory'

4. Non-Compete Obligations: Details the specific activities the vendor is prohibited from engaging in

5. Duration and Territory: Specifies the time period and geographical scope of the restrictions

6. Consideration: States the consideration provided in exchange for the non-compete obligations

7. Acknowledgments: Vendor's acknowledgment of the reasonableness of restrictions and receipt of consideration

8. Remedies: Outlines available remedies including injunctive relief and damages for breach

9. Severability: Allows court modification of unenforceable provisions while maintaining remainder of agreement

10. Governing Law: Specifies Malaysian law as governing law and jurisdiction for disputes

11. General Provisions: Standard boilerplate including notices, amendments, and entire agreement provisions

Optional Sections

1. Non-Solicitation: Additional restrictions on soliciting customers or employees - used when there's direct customer/employee relationship risk

2. Confidentiality: Detailed confidentiality provisions - used when not covered in a separate agreement

3. Return of Property: Obligations regarding return of company property - used for vendors with access to physical or digital assets

4. Compliance with Industry Regulations: Industry-specific compliance requirements - used for regulated industries

5. Assignment: Rights to assign the agreement - used when assignment rights are important to the business

6. Survival: Specifies which provisions survive termination - used for complex agreements with multiple obligations

Suggested Schedules

1. Schedule 1 - Restricted Activities: Detailed list of specific activities prohibited under the non-compete

2. Schedule 2 - Restricted Territory: Detailed description or map of the geographical areas covered

3. Schedule 3 - Competing Businesses: List of specific competitors or types of competing businesses

4. Schedule 4 - Consideration Details: Breakdown of any monetary or other consideration provided

5. Appendix A - Vendor's Prior Commitments: Declaration of any existing obligations that might affect compliance

6. Appendix B - Compliance Requirements: Industry-specific compliance requirements and certifications

Authors

Alex Denne

Head of Growth (Open Source Law) @ ¶¶Òõ¶ÌÊÓƵ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

alex.den.21@genieai.co
Relevant legal definitions








































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Industries

Contracts Act 1950: Primary legislation governing contract formation, validity, and enforcement in Malaysia. Essential for ensuring the non-compete agreement meets basic contractual requirements.

Competition Act 2010: Regulates anti-competitive practices and ensures non-compete provisions don't violate fair competition principles. Section 4 particularly addresses anti-competitive agreements.

Trade Description Act 2011: Relevant for ensuring any descriptions of restricted activities or business areas are accurately defined in the agreement.

Companies Act 2016: Important for understanding the corporate framework and ensuring the agreement aligns with corporate governance requirements.

Employment Act 1955: May be relevant if the vendor was previously an employee, as it can affect the interpretation of post-relationship restrictions.

Specific Industries' Regulatory Acts: Depending on the industry (e.g., financial services, healthcare), specific regulations may affect the scope and enforceability of non-compete provisions.

Common Law Principles on Restraint of Trade: Malaysian courts follow common law principles requiring non-compete clauses to be reasonable in duration, geographical scope, and protected interests.

Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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