What clauses are required in a United Kingdom Non-Compete/Non-Disclosure Agreement?

United Kingdom law requires specific provisions including: Protection of Legitimate Business Interest, Severability of Restrictions, Garden Leave. Contract.DIY automatically includes all mandatory clauses with proper legal citations when generating your Non-Compete/Non-Disclosure Agreement.

What terms are prohibited in a United Kingdom Non-Compete/Non-Disclosure Agreement?

Under United Kingdom law, certain provisions are void or unenforceable, including: Non-compete restrictions that are wider than necessary to protect legitimate interests; Penalty clause for breach of non-compete. Contract.DIY is built to avoid these terms and will warn you if your description suggests including something that's not legally permissible.

How does Contract.DIY ensure my Non-Compete/Non-Disclosure Agreement complies with United Kingdom law?

Every generated contract goes through 7 automated compliance checks specific to United Kingdom. These cover mandatory provisions, prohibited terms, proper citations, and formation requirements. Any issues are flagged before you download.

Can I use this Non-Compete/Non-Disclosure Agreement template outside of United Kingdom?

This template is specifically tailored to United Kingdom law. Using it in another jurisdiction may result in missing requirements or including provisions that don't apply. We recommend generating a new contract with the correct jurisdiction selected for full compliance.

United Kingdom Non-Compete/Non-Disclosure Agreement — Free Template Generator

Key legal considerations

You are generating a UK non-compete / restrictive covenant governed by English law. This is one of the most litigated areas of UK contract law. 1. RESTRAINT OF TRADE DOCTRINE: All post-termination restrictive covenants are prima facie void as restraints of trade. The employer bears the burden of proving the restriction is reasonable (Nordenfelt [1894]). 2. THE TEST: (a) Does the restriction protect a legitimate business interest? (b) Is it no wider than reasonably necessary for that protection? If either fails, the restriction is unenforceable. 3. LEGITIMATE INTERESTS: (a) Trade secrets and highly confidential information (Faccenda Chicken: distinguish trade secrets from mere confidential information), (b) customer/client connections, (c) stability of the workforce (preventing poaching). 4. REASONABLENESS: Duration: 6–12 months is typical; beyond 12 months very rarely enforced. Geographic scope: must match the business's actual operating area. Activity scope: should target the specific competitive activity, not all business. 5. TYPES OF COVENANT: Non-compete (most restrictive — hardest to enforce), non-solicitation of clients, non-solicitation of employees (non-poaching), non-dealing. 6. GARDEN LEAVE: A useful alternative or complement. Employee remains employed but stays away from work. Period should count towards any post-termination restriction. 7. SEVERABILITY: Following Tillman v Egon Zehnder [2019] UKSC 32, courts can sever offending words from a restriction (blue pencil test). Include a clear severability clause. 8. INJUNCTIVE RELIEF: Primary remedy. Apply for interim injunction under American Cyanamid principles. Speed is essential — delay undermines the claim. 9. NO FINANCIAL COMPENSATION REQUIRED: Unlike many EU jurisdictions, English law does NOT require the employer to pay financial compensation during the restriction period. However, garden leave pay may apply. 10. FRESH CONSIDERATION: If adding a non-compete to an existing employee, fresh consideration is needed (e.g., pay rise, bonus, promotion).

What's required

Mandatory clauses for a valid non-compete/non-disclosure agreement under United Kingdom law.

Protection of Legitimate Business Interest
Nordenfelt v Maxim Nordenfelt [1894] AC 535; Faccenda Chicken v Fowler [1987] Ch 117
Severability of Restrictions
Tillman v Egon Zehnder Ltd [2019] UKSC 32
Garden Leave
Governing Law and Jurisdiction
Contracts (Rights of Third Parties) Act 1999 Exclusion
Contracts (Rights of Third Parties) Act 1999

What's prohibited

Terms and provisions that are void or unenforceable under United Kingdom law.

Non-compete restrictions that are wider than necessary to protect legitimate interests
English courts will not enforce a restrictive covenant that goes beyond what is reasonably necessary to protect a legitimate business interest. A restriction that is too broad in geographic scope, duration, or activity prohibited will be struck down as an unreasonable restraint of trade (Herbert Morris Ltd v Saxelby [1916] AC 688). UK courts do not rewrite overly broad restrictions — they either enforce or strike them down (subject to severance per Tillman v Egon Zehnder [2019] UKSC 32).
Herbert Morris Ltd v Saxelby [1916] AC 688; Tillman v Egon Zehnder [2019] UKSC 32
Penalty clause for breach of non-compete
A clause imposing a fixed sum for breach that is extravagant or unconscionable in comparison to the greatest loss that could conceivably follow from breach is an unenforceable penalty (Cavendish Square Holding BV v Makdessi [2015] UKSC 67). Pre-estimate of damages (liquidated damages) is permissible, but must be a genuine pre-estimate, not punitive.
Cavendish Square Holding v Makdessi [2015] UKSC 67

Legal references

Key statutes and regulations that govern non-compete/non-disclosure agreements in United Kingdom.

Nordenfelt v Maxim Nordenfelt Guns (Restraint of Trade Doctrine)
Nordenfelt v Maxim Nordenfelt [1894] AC 535
The foundational House of Lords case establishing that a restraint of trade is enforceable only if (a) it protects a legitimate business interest and (b) it goes no further than is reasonably necessary for that protection.
Faccenda Chicken v Fowler (Confidential Information Classification)
Faccenda Chicken Ltd v Fowler [1987] Ch 117
Established the three-tier classification: (1) trivial information (unprotectable), (2) confidential information (protectable during employment only), and (3) trade secrets (protectable post-employment even without a restrictive covenant).
Tillman v Egon Zehnder (Severability of Restrictive Covenants)
Tillman v Egon Zehnder Ltd [2019] UKSC 32
Supreme Court confirmed the blue pencil test for severance of restrictive covenants: words rendering a restriction too wide can be struck out if the remaining text is a sensible and enforceable provision.
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Unfair Contract Terms Act 1977
Unfair Contract Terms Act 1977, c.50
Restricts the extent to which liability arising under a contract or tort can be excluded by contract terms. Certain exclusions (death/personal injury from negligence) are void.
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Data Protection Act 2018 / UK GDPR
Data Protection Act 2018, c.12
UK data protection framework implementing UK GDPR. Applies to all processing of personal data by UK controllers and processors.
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