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Restrictive Covenant Agreement Template for Singapore

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Key Requirements PROMPT example:

Restrictive Covenant Agreement

"I need a Restrictive Covenant Agreement for a senior software developer in Singapore who will be leaving our company in March 2025, focusing mainly on protecting our client relationships and technical IP with a 12-month restriction period."

Document background
Restrictive Covenant Agreements are essential tools for businesses operating in Singapore to protect their legitimate interests when key employees leave the organization. These agreements typically become relevant during hiring or separation processes, particularly for employees with access to sensitive information or valuable client relationships. The document outlines specific post-employment restrictions, including non-compete and non-solicitation provisions, while ensuring compliance with Singapore employment law and common law principles. The agreement must be carefully drafted to balance business protection with reasonable limitations that courts will enforce.
Suggested Sections

1. Parties: Identification and details of the contracting parties

2. Background: Context and purpose of the agreement, including the legitimate business interests being protected

3. Definitions: Key terms used throughout the agreement including Restricted Business, Restricted Period, Territory

4. Restrictive Covenants: Core restrictions including non-compete, non-solicitation, and non-dealing obligations

5. Duration: Time period for which restrictions apply, ensuring compliance with Singapore law on reasonable duration

6. Geographic Scope: Territorial limits of restrictions within reasonable bounds under Singapore law

7. Consideration: Value provided in exchange for the restrictions to ensure enforceability

8. Governing Law and Jurisdiction: Specification of Singapore law as governing law and Singapore courts' jurisdiction

Optional Sections

1. Garden Leave: Provisions for paid leave during notice period, applicable for senior executives

2. Intellectual Property Protection: Additional IP-related restrictions when IP is a significant business asset

3. Remedies: Specific remedies for breach including injunctive relief and liquidated damages

4. Severability: Provisions allowing court to modify overly broad restrictions rather than invalidating entirely

Suggested Schedules

1. Schedule 1 - Restricted Activities: Detailed list of prohibited activities and business areas

2. Schedule 2 - Restricted Customers: List of customers covered by non-solicitation provisions

3. Schedule 3 - Restricted Territory: Detailed geographic boundaries of restrictions with specific regions/countries

4. Schedule 4 - Consideration Details: Detailed breakdown of compensation or benefits provided in exchange for restrictions

Authors

Alex Denne

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

Relevant legal definitions




















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Industries

Employment Act (Cap. 91): Primary legislation governing employment relationships in Singapore, which provides the basic framework for employment terms and conditions

Competition Act (Cap. 50B): Legislation that governs anti-competitive practices, which may impact the scope and enforceability of restrictive covenants

Singapore Contract Law: Common law principles governing contract formation, validity, and enforcement in Singapore

Doctrine of Restraint of Trade: Legal principle stating that restrictive covenants are prima facie void unless they are reasonable and protect legitimate business interests

Man Financial v Wong Bark Chuan David [2008]: Key Singapore case law establishing principles for enforcement of restrictive covenants and reasonableness test

Sembcorp Marine Ltd v PPL Holdings Pte Ltd [2013]: Singapore Court of Appeal case providing guidance on interpretation and enforcement of restrictive covenants

Center for Creative Leadership v Byrne [2013]: Singapore case law addressing the scope and reasonableness of non-compete restrictions

Geographic Scope Requirements: Legal requirement that territorial restrictions in restrictive covenants must be reasonable and not exceed necessary business protection

Duration Requirements: Legal principle requiring time restrictions in covenants to be justifiable and not longer than necessary to protect legitimate interests

Legitimate Business Interests: Legal framework for protecting trade secrets, confidential information, customer connections, and workforce stability

Singapore Constitution Article 9(1): Constitutional provision on right to life and personal liberty that may impact enforcement of restrictive covenants

Singapore Constitution Article 10: Constitutional provision prohibiting slavery and forced labor, relevant to the assessment of restrictive covenant enforceability

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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