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Supplier Non Compete Agreement

Supplier Non Compete Agreement Template for Malaysia

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Key Requirements PROMPT example:

Supplier Non Compete Agreement

"I need a Supplier Non-Compete Agreement for a Malaysian technology manufacturer, restricting suppliers from working with competitors in Southeast Asia for 18 months after contract termination, with special focus on protecting our semiconductor manufacturing processes and trade secrets."

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Document background
The Supplier Non-Compete Agreement is essential for businesses operating in Malaysia who need to protect their legitimate business interests when engaging with suppliers who may gain access to sensitive information, trade secrets, or strategic knowledge. This document is particularly relevant when suppliers are exposed to proprietary information, manufacturing processes, client lists, or other competitive advantages. The agreement must be carefully drafted to comply with Malaysian law, particularly the Contracts Act 1950 and Competition Act 2010, ensuring that restrictions are reasonable in scope, duration, and geographical coverage. It should be used when establishing new supplier relationships or updating existing arrangements where the supplier could potentially become a competitor or share competitive advantages with competitors.
Suggested Sections

1. Parties: Identification of the contracting parties - the company and the supplier

2. Background: Context of the business relationship and reason for the non-compete agreement

3. Definitions: Key terms including Confidential Information, Competitive Business, Restricted Period, Restricted Territory

4. Scope of Business Relationship: Description of the business relationship between the parties

5. Non-Compete Obligations: Core restrictions on competitive activities, including specific prohibited actions

6. Duration and Territory: Time period and geographical scope of the restrictions

7. Exceptions and Permitted Activities: Activities explicitly allowed despite the non-compete provisions

8. Confidentiality Obligations: Protection of confidential information and trade secrets

9. Acknowledgment of Reasonableness: Supplier's acknowledgment that restrictions are reasonable and necessary

10. Remedies: Consequences of breach and available legal remedies including injunctive relief

11. General Provisions: Standard contract clauses including governing law, notices, and entire agreement

Optional Sections

1. Non-Solicitation: Additional restrictions on soliciting customers or employees, included when broader protection is needed

2. Assignment: Rights to assign the agreement, included when transfer of rights may be necessary

3. Survival: Provisions that continue after termination, included for additional clarity

4. Independent Contractor: Clarification of relationship status, included when supplier might be mistaken for an employee

5. Compliance with Laws: Specific obligations regarding legal compliance, included for regulated industries

6. Training and Support: Provisions about any training or support provided, included when supplier receives significant proprietary knowledge

Suggested Schedules

1. Schedule 1 - Restricted Territory: Detailed description of geographical areas where restrictions apply

2. Schedule 2 - Competitive Business: Detailed list of prohibited business activities and competitors

3. Schedule 3 - Confidential Information: Specific categories of confidential information covered

4. Appendix A - Existing Commitments: List of supplier's pre-existing business commitments that are excluded from restrictions

5. Appendix B - Consideration: Details of any consideration provided in exchange for non-compete obligations

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. Crucial for ensuring the non-compete agreement meets basic contractual requirements and is legally binding.

Competition Act 2010: Regulates anti-competitive practices in Malaysia. Important for ensuring the non-compete provisions are not unreasonably restrictive and do not violate competition laws.

Federal Constitution Article 5: Protects fundamental liberties including the right to livelihood. Relevant for ensuring the non-compete restrictions don't unreasonably restrict the supplier's right to conduct business.

Trade Description Act 2011: Governs trade practices and descriptions in Malaysia. Relevant for defining the scope of business activities covered under the non-compete agreement.

Specific Relief Act 1950: Provides remedies for breach of contract, including injunctive relief which is crucial for enforcement 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 business scope.

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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