Practical examples of sales agreement with non-compete clause examples

Real-world examples of sales agreement with non-compete clause examples

Let’s start where most people actually need help: seeing how these clauses look in real contracts. Below are several examples of sales agreement with non-compete clause examples across different industries. The language is simplified, but the structure mirrors what you’ll find in many U.S. business agreements.

Example 1: Commissioned B2B sales representative

A mid-size industrial equipment manufacturer hires a commissioned sales rep to cover the Midwest. The company is worried that, after a year of building relationships, the rep will jump to a competitor.

Sample non-compete language (excerpt):

During the term of this Agreement and for a period of 12 months following its termination, Sales Representative shall not, within the states of Illinois, Indiana, Wisconsin, or Michigan, directly or indirectly sell, market, or solicit orders for industrial packaging equipment that competes with the Products to any customer or prospective customer with whom Sales Representative had material contact on behalf of Company.

Why this works reasonably well:

• Limited to 12 months (many U.S. courts view 6–24 months as more reasonable than multi‑year bans).
• Tied to specific states instead of “anywhere in the world.”
• Focused on customers where the rep had material contact, not the entire industry.

This is one of the best examples because it balances protection with a realistic scope. Courts often look for this kind of tailoring, as reflected in guidance from the U.S. Federal Trade Commission (FTC) on restrictive covenants and competition policy.

Example 2: SaaS account executive in a niche vertical

A SaaS company selling compliance software to banks hires an account executive (AE). The company’s real concern is its pipeline and confidential pricing, not the AE working in tech generally.

Sample non-compete language (excerpt):

For 9 months after the end of Employee’s employment, Employee shall not, within the United States, accept employment in a sales or account management role with any business that (a) offers software primarily designed for bank regulatory compliance and (b) competes directly with the Company’s core product, as listed in Exhibit A.

The twist here is the use of an exhibit listing the core product and named competitors. That clarity makes this one of the more practical examples of sales agreement with non-compete clause examples, because both sides know exactly what’s off-limits.

Example 3: Territory-based distributor agreement

A U.S. food manufacturer appoints an exclusive distributor for the Southwest. The manufacturer wants to prevent the distributor from pushing a rival brand while holding the exclusive territory.

Sample non-compete language (excerpt):

During the term of this Agreement, Distributor shall not, within the Territory, market, sell, or distribute any snack food products that are directly competitive with the Products. Following termination of this Agreement, Distributor shall be free to sell competing products, provided that Distributor does not use Company’s confidential information or trade secrets in doing so.

Notice what happens here: the non-compete only applies during the term of the agreement. After termination, the restriction shifts to a standard non‑disclosure / trade secret protection. This is common in distribution deals and is one of the cleaner examples include in many modern sales templates.

Example 4: Online sales manager with access to national pricing

A consumer electronics brand employs an online sales manager who negotiates major deals with national retailers and marketplace platforms. The brand wants to prevent immediate defection to a direct competitor.

Sample non-compete language (excerpt):

For 6 months following the end of Employee’s employment, Employee shall not accept a position substantially similar to Employee’s current role with any business whose primary line of business is the manufacture and sale of consumer audio equipment and that derives more than 50% of its sales through Amazon, Walmart.com, or BestBuy.com.

This is a narrow, role‑specific restriction. It doesn’t block the employee from:

• Working in other product categories (e.g., TVs, laptops), or
• Working for retailers, agencies, or logistics providers.

It’s a good example of sales agreement with non-compete clause examples that focuses on the competitive risk, not the person’s entire career.

Example 5: Franchise-style retail sales agreement

A franchisor licenses its brand and systems to a franchisee running a specialty coffee shop. The franchisor wants to prevent the franchisee from opening a competing coffee shop next door under a different name.

Sample non-compete language (excerpt):

During the term of this Agreement and for 24 months thereafter, Franchisee shall not own, operate, or have any financial interest in any coffee shop or café business that derives more than 30% of its revenue from the sale of specialty coffee beverages within a 5‑mile radius of the Store.

This type of radius‑based restriction is common in franchise and retail sales deals. It’s more likely to be enforceable when:

• The radius is reasonable (5 miles in a dense city, maybe 15–25 miles in rural areas).
• The time limit is finite (here, 24 months).

For policy and case law background on non-compete enforcement, the National Conference of State Legislatures offers a helpful state-by-state overview.

Example 6: M&A asset sale with retained sales team

A larger company acquires the assets and customer contracts of a smaller competitor but keeps several of the target’s salespeople. The buyer wants to protect the goodwill it just purchased.

Sample non-compete language (excerpt):

Seller and its principals agree that, for a period of 36 months following Closing, they will not, directly or indirectly, engage in the business of manufacturing or selling commercial HVAC filters within the states of Texas, Oklahoma, and Louisiana. This restriction shall not prohibit Seller’s principals from owning up to 5% of the outstanding shares of a publicly traded company engaged in such business.

Courts often treat non-compete clauses in sale-of-business deals more favorably than in ordinary employment contracts, because the buyer is paying for customer goodwill. That’s why you often see longer restrictions (e.g., 3–5 years) in M&A agreements.

The American Bar Association has recurring commentary on trends in sale-of-business non-competes; a useful starting point is the ABA Business Law Section’s coverage of restrictive covenants in transactions.

Example 7: Independent sales consultant for a medical device company

A medical device manufacturer hires an independent consultant to open doors with hospital buyers. The consultant already works with other healthcare clients, so the non-compete has to be surgically narrow.

Sample non-compete language (excerpt):

During the term of this Agreement and for 12 months thereafter, Consultant shall not represent, promote, or solicit orders for any orthopedic implant products that directly compete with the Products to any hospital, surgery center, or physician group within Consultant’s Assigned Accounts, as listed in Exhibit B.

Here, the restriction is limited to:

• A specific product category (orthopedic implants).
• A defined customer list (Assigned Accounts in Exhibit B).

This is one of the best examples of sales agreement with non-compete clause examples for consultants, because it respects the consultant’s broader business while still protecting the manufacturer’s core relationships.

Example 8: Inside sales team in a state with strict limits on non-competes

Some U.S. states—most notably California, Oklahoma, and North Dakota—largely ban employee non-compete agreements. Other states, like Washington and Colorado, limit them by salary thresholds and notice requirements. In those places, companies often lean heavily on non-solicitation and confidentiality clauses instead of traditional non-competes.

Sample restrictive language (California-style, excerpt):

Employee shall not, during employment and for 12 months thereafter, directly or indirectly solicit business from any customer or prospective customer of Company with whom Employee had material contact during the last 12 months of employment, for the purpose of providing products or services that are competitive with the Company’s products or services.

This is a non-solicitation clause rather than a non-compete, but in practice it often serves a similar purpose: protecting the customer base. For a high-level view of federal policy debates around non-competes, see the FTC’s policy statements on non-compete clauses and proposed rulemaking.

Key elements that show up in the best examples

Looking across these examples of sales agreement with non-compete clause examples, certain patterns repeat. When lawyers draft clauses that actually stand up, they usually fine‑tune four levers:

1. Time period
Most enforceable examples include a defined duration, commonly between 6 and 24 months for employees and sales reps, and up to 36–60 months for sale-of-business deals. Anything longer for ordinary employees is more likely to be challenged.

2. Geography
Rather than “worldwide,” better clauses specify:

• Named states or countries
• A radius around a store or territory (e.g., 5 miles)
• Regions where the salesperson actually operated

3. Scope of activity
In the best examples, the clause focuses on competitive activities:

• Selling or promoting specific categories of products
• Working in similar sales roles for direct competitors
• Targeting defined customer lists or assigned accounts

Broad bans like “any position with any competitor” are the ones that often get trimmed or struck.

4. Protected interest
Courts look for a legitimate business interest: trade secrets, confidential information, goodwill, or specialized training. The more your clause ties the restriction to that interest, the more it resembles the stronger real examples.

For a legal research perspective on these factors, law school resources like Harvard Law School’s Program on Corporate Governance regularly discuss trends in employment and transactional covenants.

2024–2025 trends affecting sales agreements with non-competes

Non-compete law is moving fast, especially in the U.S. When you look at recent examples of sales agreement with non-compete clause examples, you’ll notice they’re narrower than contracts drafted ten years ago.

Some current trends:

More states limiting or banning non-competes
States including Illinois, Colorado, Washington, and others have:

• Set minimum salary thresholds for enforceable non-competes.
• Required advance written notice before the employee signs.
• Restricted non-competes for certain professions (e.g., healthcare workers in some states).

The National Conference of State Legislatures tracks these changes in its state non-compete survey.

Federal scrutiny and the FTC’s proposed rule
The FTC has proposed a nationwide rule that would significantly limit most employee non-compete clauses. As of late 2024, litigation and political debate are ongoing, so the final outcome is uncertain. But many companies are already adjusting their agreements by:

• Shortening non-compete durations.
• Relying more on non-solicitation and confidentiality.
• Carving out high-level executives or transaction-based non-competes.

Global and remote sales teams
With remote work and cross‑border teams, geography-based clauses that simply say “within X miles” often don’t make sense. Newer examples of sales agreement with non-compete clause examples are more likely to define territory as:

• Specific countries or economic regions (e.g., EU, US, UK).
• Named accounts or verticals instead of physical territories.

Data and trade secret focus
Because courts consistently enforce trade secret protections, many modern sales agreements double down on:

• Detailed confidentiality obligations.
• Clear definitions of customer lists, pricing, and pipeline data as confidential.

This trend is reflected in guidance under the federal Defend Trade Secrets Act (DTSA), summarized by the U.S. Patent and Trademark Office at uspto.gov. Even if a non-compete fails, a strong confidentiality clause can still provide real protection.

Drafting tips inspired by these real examples

If you’re working with counsel to draft or revise your own agreement, here are practical takeaways drawn from the best examples of sales agreement with non-compete clause examples above:

• Start from the risk, not the template. Ask: What exactly are we afraid of? Losing a territory? A specific customer list? A niche technology? Draft the restriction to match that risk.
• Tie the clause to the salesperson’s actual role. A junior inside rep with no pricing authority shouldn’t face the same non-compete as a VP of Sales with full P&L responsibility.
• Make geography rational. If the salesperson only worked in Texas, a nationwide non-compete is harder to justify. Several of the real examples limit the territory to where the rep actually sold.
• Use exhibits for clarity. Listing competitors, product categories, or assigned accounts in an exhibit (like Exhibit A or B) keeps the main clause readable and reduces ambiguity.
• Build in blue‑pencil language where allowed. In some states, courts can modify overbroad terms rather than voiding the entire clause, if the contract explicitly allows it. Your attorney can advise whether that’s wise in your jurisdiction.
• Pair non-compete with non-solicitation and NDA. Even if a non-compete is later struck, a well-drafted non-solicitation and confidentiality agreement can still protect your relationships and data.

FAQs about examples of sales agreement with non-compete clause examples

Q1. Can you show a short example of a non-compete clause in a sales agreement?
Here is a very simple example of a clause often used for a commissioned rep:

For 12 months after the end of this Agreement, Representative shall not, within the Territory, sell or solicit orders for products that are competitive with the Products to any customer or prospect with whom Representative had business contact on behalf of Company during the last 12 months of this Agreement.

This is intentionally short; in a real contract, you would define Territory, Products, and business contact in detail.

Q2. Are non-compete clauses in sales agreements always enforceable?
No. Enforceability depends heavily on state or country law, the salesperson’s role, and how narrowly the clause is drafted. Some states (like California) largely ban employee non-competes. Others enforce them if they are reasonable in time, geography, and scope and protect a legitimate business interest. That’s why the best examples are tailored rather than copied from a generic form.

Q3. What are some common mistakes in drafting non-competes for sales reps?
The biggest mistakes seen in weak examples of sales agreement with non-compete clause examples include:

• Banning the salesperson from working in an entire industry anywhere in the world.
• Using the same boilerplate clause for every employee, from junior SDRs to the CRO.
• Failing to define key terms like “competitor,” “territory,” or “material contact.”
• Ignoring state‑specific rules on notice, salary thresholds, or banned professions.

Q4. Is a non-solicitation clause enough instead of a full non-compete?
For many sales roles, yes, a well‑written non-solicitation clause is often more realistic and more likely to be enforced. It prevents the salesperson from targeting your customers or employees, while still letting them work in their field. Several of the better real examples above use non-solicitation plus confidentiality instead of a broad non-compete.

Q5. Should I use these examples without talking to a lawyer?
You can absolutely use these examples of sales agreement with non-compete clause examples as a starting point for thinking through structure, scope, and language. But you should not treat them as plug‑and‑play templates. Non-compete law is highly jurisdiction‑specific and changing fast. A local attorney who understands employment and commercial contracts in your state or country should review any clause before you rely on it.

Bottom line: The strongest real examples of sales agreement with non-compete clause examples are not the longest or most aggressive. They are the ones that match the salesperson’s role, protect a clearly defined business interest, and respect the legal limits where you operate. Use the patterns above to have a smarter, more targeted conversation with your legal counsel.