WHAT IS A COVENANT NOT TO COMPETE?

A covenant not to compete is a promise not to compete. Any time the word covenant is used, covenant is simply a promise. A covenant not to compete is a contractual obligation or a promise not to compete against someone or a company. Typically, non-compete covenants occur in employment contexts where an employer wants to protect its employees from competing against the employer after they depart their employment. It also incurs in sales of businesses, where a business is sold and the buyer of the business wants to ensure that the seller doesn’t simply open up a competing business for it close by, which would defeat the entire purpose of buying the business.