Non-competition clause in business representative relationships
Year: 2024
Type: article
Abstract: A non-competition clause is that contractual stipulation that restricts the possibility of carrying out commercial activities similar to those carried out by virtue of the contract, both during the execution of the contract and after its termination. To be valid, it must meet certain conditions, conditions resulting from the provisions of art. 1700, para. 2, C. civ. Thus, the non-competition clause must take written form, the form necessary for its validity. Regarding the substantive conditions, from the legislation of Rep. Moldova and the specialized doctrine, it appears that they are: a) to refer to a determined territory; b) to provide for the activities that will be restricted; c) there must be a justified interest of the beneficiary of the clause; d) not to affect the freedom to carry out a commercial activity; e) not to violate the rules regarding competition. As for the effects of non-compete clauses, they must be analyzed in light of the fact that such a clause restricts the action of the principle of contractual freedom. It will begin to produce effects from the moment the contractual representation contract is terminated and will last for a period that cannot exceed 2 years. Regarding the sanction of the non-competition clause, we have to differentiate, as the non-competition clause is invalidated or the non-competition clause is violated. a) If the non-competition clause is affected by the nullity, it will attract the nullity of the entire contract if it was decisive at the conclusion of the representation contract. The determined character will be assumed. b) If the non-competition clause is violated, the effects of such a violation will have to be analyzed in the relations with the representative and in the relations with the contracting third parties.
Source: Vector European
Authors: Sergiu Bivol, Ion Bitca
Language: English
Subfield: Law
Field: Social Sciences
Domain: Social Sciences
Open Access status: gold
OpenAlex ID: W4405228841