Can this agreement be signed electronically?

Yes. Electronic signatures are generally enforceable under the federal ESIGN Act (15 U.S.C. ch. 96) and UETA where adopted, provided intent, consent, attribution, and record retention requirements are met.

Do restrictions need to be notarized?

Not typically. Notarization is not required to make a restriction enforceable, though notarization or witnesses may help prove execution depending on state practice.

What makes a restriction unenforceable?

Overbreadth in geographic scope, duration, or activity; lack of consideration; or violation of state statutes can render clauses unenforceable.

How do I choose governing law?

Select the state with the strongest connection to the parties or performance; courts will assess reasonableness and public policy if challenged.

When should I involve counsel?

Engage counsel for high-value relationships, cross-border situations, or when state law limitations on restrictive covenants may apply.

How long should records be kept?

Keep executed agreements for the term plus at least three years; retain longer when tax, healthcare, or dispute risk exists (see IRC §6501(a) and 45 CFR §164.530(j)).

Electronic Signature
Templates
Legal
Contract Restriction Agreement

Contract Restriction Agreement

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CONTRACT RESTRICTION AGREEMENT

This Contract Restriction Agreement ("Agreement") is entered into as of Effective Date: by and between Restricting Party Name: , with principal address: ; and Receiving Party Name: , with principal address: .

RECITALS

WHEREAS, Restricting Party possesses confidential information, business relationships, trade secrets, or other proprietary interests that are valuable and not generally known to the public; and

WHEREAS, Receiving Party will have access to such information or will be engaged in activities that, if unrestricted, may cause competitive harm or disclosure of Restricting Party's proprietary interests; and

WHEREAS, the parties desire to set forth covenants restricting certain conduct for the protection of the Restricting Party and to define remedies for breach.

NOW, THEREFORE, in consideration of the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are acknowledged, the parties agree as follows:

1. DEFINITIONS

1.1 "Confidential Information" means all non-public business, technical, financial, customer, supplier, pricing, marketing, strategic and other information disclosed by Restricting Party to Receiving Party, whether in written, oral, electronic or other form, and includes trade secrets as defined under applicable law.

1.2 "Restricted Activities" means the activities set forth in Section 3 and any additional categories listed in the Restricted Activities Schedule below.

2. CONSIDERATION

In consideration of the mutual promises herein and for other good and valuable consideration, including but not limited to the payment or provision of consideration described below, the sufficiency of which is acknowledged, the parties agree to be bound by the covenants contained in this Agreement.

Describe consideration provided to Receiving Party (cash, employment, access, etc.):

3. RESTRICTIVE COVENANTS

3.1 Non-Disclosure. Receiving Party shall not disclose, publish, or use Confidential Information except as necessary to perform obligations under this Agreement or as authorized in writing by Restricting Party. Receiving Party shall exercise at least the same degree of care in protecting Confidential Information as it uses to protect its own confidential information, and in no event less than reasonable care.

3.2 Non-Competition. During the Restriction Period defined in Section 4, Receiving Party shall not, directly or indirectly, own, manage, operate, control, participate in, consult with, render services for, or be connected with any business that competes with Restricting Party within the Geographic Area.

Geographic Area (describe scope):

3.3 Non-Solicitation. During the Restriction Period, Receiving Party shall not, directly or indirectly, solicit or attempt to solicit employees, independent contractors, suppliers, or customers of Restricting Party for the purpose of providing products or services competitive with those offered by Restricting Party.

Restricted Customers, Employees or Activities (list specifics, if any):

3.4 Non-Disparagement. Receiving Party shall not make unauthorized disparaging statements regarding the business, officers, directors, products, or services of Restricting Party.

4. TERM; SCOPE; REASONABLENESS

4.1 Restriction Period. The covenants in Section 3 shall remain in effect for a period commencing on Restriction Start Date: and ending on Restriction End Date: , unless earlier terminated in accordance with this Agreement.

4.2 Reasonableness. The parties acknowledge that the duration, geographic scope, and activity restrictions are reasonable and necessary to protect legitimate business interests of Restricting Party. If any court determines a restriction is unenforceable as written, the parties agree such restriction may be reformed to the maximum extent permitted by law to effectuate the original intent.

5. REMEDIES

5.1 Injunctive Relief. Receiving Party acknowledges that a breach of the covenants herein will cause irreparable harm to Restricting Party for which monetary damages alone would be inadequate. Accordingly, Restricting Party shall be entitled to seek injunctive relief, specific performance and any other equitable remedies without the requirement of posting a bond, in addition to monetary damages.

5.2 Damages and Costs. In addition to other remedies, Restricting Party shall be entitled to recover its reasonable attorneys' fees, costs of enforcement, and any damages resulting from a breach of this Agreement.

6. CONFIDENTIALITY EXCEPTIONS

Confidential Information does not include information that (a) is or becomes generally available to the public through no breach by Receiving Party; (b) was lawfully in Receiving Party's possession prior to disclosure by Restricting Party; or (c) is independently developed by Receiving Party without use of or reference to the Confidential Information.

7. ASSIGNMENT

This Agreement shall inure to the benefit of and be binding upon the parties and their respective successors and permitted assigns. Receiving Party may not assign its obligations hereunder without the prior written consent of Restricting Party, which consent shall not be unreasonably withheld.

8. NOTICES

All notices required or permitted under this Agreement shall be in writing and shall be delivered to the addresses set forth below by certified mail, return receipt requested, overnight courier, or hand delivery, and shall be effective upon receipt.

Notices to Restricting Party address: Notices to Receiving Party address:

9. AMENDMENTS; WAIVER

Any amendment or modification to this Agreement must be in writing and signed by both parties. No failure or delay by either party to exercise any right shall operate as a waiver of that right, and no waiver shall be effective unless in writing and signed by the waiving party.

10. SEVERABILITY

If any provision of this Agreement is held to be invalid, illegal or unenforceable by a court of competent jurisdiction, the remaining provisions shall remain in full force and effect. The parties agree that, to the extent permissible, any invalid provision shall be reformed to the minimum extent necessary to make it enforceable.

11. GOVERNING LAW

This Agreement shall be governed by and construed in accordance with the laws of the State of , without regard to principles of conflict of laws.

12. ENTIRE AGREEMENT

This Agreement, together with any schedules or exhibits signed by the parties, constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements, representations, and understandings, whether oral or written.

13. COUNTERPARTS

This Agreement may be executed in counterparts, each of which shall be deemed an original and all of which together shall constitute one instrument. Signatures delivered by electronic or facsimile transmission shall be binding.

14. MISCELLANEOUS

The headings contained in this Agreement are for reference only and shall not affect the meaning or interpretation of this Agreement. The parties acknowledge they have read and understand this Agreement and have had an opportunity to obtain independent counsel.

Restricting Party:

By:

Date:

Receiving Party:

By:

Date:

What a Contract Restriction Agreement Is and when it applies

A Contract Restriction Agreement documents limits one party places on another’s ability to enter into certain contracts, solicit clients, or perform services for specified third parties. It typically defines the restricted activities, geographic or client scopes, duration, and permissible exceptions. Organizations use this agreement to protect business relationships, prevent conflicts of interest, and preserve proprietary arrangements. The document can appear as a standalone contract or as a clause within employment, vendor, or subcontractor agreements; clear definitions and measurable restrictions improve enforceability and reduce later disputes.

Why this agreement matters for risk control

A well-drafted Contract Restriction Agreement clarifies expectations, reduces uncertainty over competing arrangements, and documents consent to limits. When enforceable, it helps preserve goodwill, protect investment in relationships, and create remedies for breach, while reducing litigation risk when narrowly tailored and consistent with state law.

Who commonly prepares and signs these agreements

Organizations and individuals use Contract Restriction Agreements to set clear boundaries for business relationships and third-party engagements.

Employers and HR teams seeking to limit solicitation or external contracting by employees
Procurement and vendor managers protecting exclusive supplier or reseller arrangements
Companies acquiring assets or client lists that want transitional non-compete or non-solicit protections

Properly identifying the parties and their roles at the outset reduces ambiguity and helps determine applicable law and enforceability.

Step-by-step: completing a Contract Restriction Agreement

Follow these core steps to create a clear, enforceable agreement that fits your situation.

01

Identify Parties: Enter full legal names and entity types for each party.
02

Define Restrictions: Specify prohibited activities, clients, and locations with measurable terms.
03

Set Duration: State precise start and end dates or triggering events.
04

Include Remedies: Describe consequences for breach, including injunctive relief or damages.

Core elements to include in a professional agreement

These six components form the backbone of a Contract Restriction Agreement and improve clarity and enforceability.

Parties

Clearly identify each party’s legal name, business form, and contact details so obligations and remedies can be enforced.

Scope

Define exactly what conduct is restricted, including named clients, services, and activities, to avoid vagueness.

Term

State a definite start and end date or event, and specify survival of certain clauses after termination if needed.

Consideration

Describe what each party receives (payment, employment, access to resources) to show the restriction is supported by value.

Remedies

List available remedies such as injunctive relief, liquidated damages, or recovery of attorneys’ fees for breaches.

Governing Law

Select the state law that will interpret the agreement and specify venue for disputes to reduce forum uncertainty.

Required identifying and administrative information

Party Name: Full legal name

Entity Type: Corporation, LLC, individual, etc.

Primary Address: Street, city, state, ZIP

Contact Email: Business or legal contact

Effective Date: MM/DD/YYYY

Signature Info: Signer name and title

Consequences and legal risks of faulty or missing terms

Unenforceable Clause: Court may refuse to enforce overly broad restrictions

Damages Exposure: Breach can trigger monetary liability

Injunction Limits: Courts require narrow tailoring for injunctive relief

Attorney Fees: Litigation costs may be significant

Regulatory Risk: State statutes may limit non-compete enforceability

Tax/Employment Impact: Improper terms can affect payroll or benefits treatment

Common drafting and execution mistakes

Using undefined terms that create ambiguity and litigation risk
Drafting overly broad geographic or temporal limits that courts may strike
Failing to provide adequate consideration to support the restriction
Neglecting to check state-specific enforceability rules before execution

Typical routing: where to send the signed agreement

A standard processing flow ensures all parties receive executed copies and the organization retains an authoritative record.

Internal Review: Legal or HR reviews and approves final text
Signatory Delivery: Send to each signer for signature and date
Record Retention: Store executed copies in secure records system
Distribution: Provide countersigned PDFs to all parties

Digital signing and eSubmission considerations

Use an eSignature platform that supports secure audit trails, meets applicable compliance standards, and can produce tamper-evident signed records.

Authentication: Email, SMS codes, or stronger methods
Audit Trail: IP, timestamp, and action log
Document Formats: PDF, DOCX supported

Ensure the chosen workflow documents intent, consent, and retention practices consistent with ESIGN and state law to support enforceability.

How to customize the online workflow for this agreement

Configure fields and routing so signatures are collected in the correct order and records are retained automatically.

Field	Configuration
Signature	Required, signer name and date
Initials	Optional, use for each clause if desired
Exhibit Upload	Attach client lists or schedules
Routing Order	Sequential or parallel signer flow

Comparing eSignature providers for executing Contract Restriction Agreements

Select a vendor that supports legally enforceable eSignatures, audit trails, and the level of authentication required for your use case; signNow is listed first for comparison purposes.

	signNow	DocuSign	Adobe Sign	PandaDoc	HelloSign
Starting Price	$8/user/mo	$15/user/mo	$14/user/mo	$19/user/mo	$15/user/mo
Free Trial	7-day free trial	Varies by plan	Varies by plan	Varies by plan	Varies by plan
Bulk Send	Yes	Yes	Yes	Yes	No
Audit Trail	Yes	Yes	Yes	Yes	Yes
HIPAA Compliant	Yes	Yes	Yes	No	No

Practical drafting tips for stronger agreements

Adopt these drafting practices to reduce the risk of unenforceability and litigation.

Be Specific

Define restricted activities, clients, and locations with measurable criteria rather than broad or vague language.

Limit Duration

Choose reasonable time periods tied to legitimate business interests to improve enforceability.

Provide Consideration

Document the consideration supporting the restriction such as employment, access to confidential information, or a buyout payment.

Tailor by State

Review state law before finalizing terms; adapt language where statutes or case law impose limits.

Frequently asked questions about Contract Restriction Agreements

Answers to common questions about drafting, signing, and enforcing Contract Restriction Agreements in the United States.

Need help? Contact support

Can this agreement be signed electronically?
Yes. Electronic signatures are generally enforceable under the federal ESIGN Act (15 U.S.C. ch. 96) and UETA where adopted, provided intent, consent, attribution, and record retention requirements are met.
Do restrictions need to be notarized?
Not typically. Notarization is not required to make a restriction enforceable, though notarization or witnesses may help prove execution depending on state practice.
What makes a restriction unenforceable?
Overbreadth in geographic scope, duration, or activity; lack of consideration; or violation of state statutes can render clauses unenforceable.
How do I choose governing law?
Select the state with the strongest connection to the parties or performance; courts will assess reasonableness and public policy if challenged.
When should I involve counsel?
Engage counsel for high-value relationships, cross-border situations, or when state law limitations on restrictive covenants may apply.
How long should records be kept?
Keep executed agreements for the term plus at least three years; retain longer when tax, healthcare, or dispute risk exists (see IRC §6501(a) and 45 CFR §164.530(j)).

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