Non-compete agreements

and

Non-disclosure agreements

are often confused as being one and the same.

But these 2 legal agreements are very distinctive

agreements, serving two different purposes.

The non-compete agreement

A one-way agreement in which one party (the Recipient) agrees not to compete against the other (the Disclosing Party):

- In a specific line of business- In a certain geographic area- For a specific period of time

The non-disclosure agreement

This type of legal agreement simply limits or restricts an independent contractor, employee, business partner or potential affiliate from dis-closing confidential information such as trade secrets, documents etc.

Differences betweennon-compete and non-disclosure

1. Their function

One agreement protects a business from unfair competition while the other agreement protects its trade secrets and confidential informa-tion.

Both agreements are designed to protect business interests, but cover two distinct topics of importance.

2. One-way / mutual

Another distinct difference is in the fact that non-competes are gener-ally a one-way contract, while non-disclosures, on the other hand, can often be mutual.

For example, when two companies form a joint venture to work on a specific project, both are likely to be disclosing private and confiden-tial information to the other, so an non-disclosure agreement will specify what information, from each party, is to remain confidential.

A non-compete agreement is just a one-way agreement that’s de-signed to prevent a business from unfair competition from a former employee or contractor, while the non-disclosure agreement is often (but not always) a mutual agreement that’s designed to protect pri-vate and confidential information from being disclosed to competitors and the public-at-large.