This clause simply says you cannot do business with certain parties—usually competitors or specific companies—for a set time after the contract ends. It is considered "low risk" because it is narrow and straightforward; it does not restrict where you work or who you can hire. Unlike a non-compete clause (which stops you from working in an entire industry), this only blocks transactions with named or defined parties. For example, a software developer might agree not to sell services to Company X for 12 months after leaving, but can work for any other company or client. Courts generally view this as reasonable because it protects a specific business relationship without shutting down your entire career.
This is relatively safe to accept, but still clarify exactly which parties or types of customers are restricted—vague language creates disputes later. Ask whether the restriction applies only to direct competitors or also to customers, and whether it covers companies that don't exist yet. Consider negotiating an exception if a restricted party approaches you first, since you shouldn't be penalized for being contacted. ---
Frequently Asked Questions
What does this clause mean in simple terms?
This clause simply says you cannot do business with certain parties—usually competitors or specific companies—for a set time after the contract ends.
Why should I care about this clause?
It is considered "low risk" because it is narrow and straightforward; it does not restrict where you work or who you can hire.
What are my options?
Unlike a non-compete clause (which stops you from working in an entire industry), this only blocks transactions with named or defined parties.
How does this affect small businesses?
For example, a software developer might agree not to sell services to Company X for 12 months after leaving, but can work for any other company or client.