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.
non-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-
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.