• 3 year bond

I am employing trainee for my Ayurveda wellness center and teaching his/her Special kind of therapist. But I want employee should not misuse this therapies, after obtaining training/competence, for his/her personal use or competitor's, which will damage my business.
To protect my business I would like to have service bond of where he/she can leave the employment but can not use( practice) these particular therapy which learn from me for at-least 4-5years

Appreciate your kind advce
Asked 4 years ago in Business Law

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14 Answers

Hello,

You may contact a lawyer or anyone on this portal who may help you in drafting such contract with appropriate clause in the same.

Regards

Anilesh Tewari
Advocate, New Delhi
17940 Answers
377 Consultations

5.0 on 5.0

This will be a contract with a non competitive clause basically.

Regards

Anilesh Tewari
Advocate, New Delhi
17940 Answers
377 Consultations

5.0 on 5.0

1. If there is some secret training or confidential matters are disclosed during training then you can make some clause included in the job contract so they can not quit you for sometime.

2. So three years of Bind is fine but there must be shown to be expenses incurred towards their training to make this Bind enforceable under law as bondage often ignored by law if it is found to be reprehensible or put unnecessary restrictions on free trade and employment.

3. Moreover in medical condition also one can quit the job irrespective of the Bind.

4. So you can make such agreement but such agreement are not fool proof and once can quit the job anyway.

Devajyoti Barman
Advocate, Kolkata
22515 Answers
402 Consultations

5.0 on 5.0

Dear Sir, you have to entered in to business service agreement (employment service agreement) to mention all the conditions which you are wanted for secured your business.

C. V. Jadhav
Advocate, Bangalore
545 Answers
18 Consultations

4.7 on 5.0

Please see section 27 Contract Act

Kishan Dutt Kalaskar
Advocate, Bangalore
6050 Answers
381 Consultations

4.8 on 5.0

You can call upon employee to execute 3 year bond as you are spending money on his training

2) it should be specified that in case employee leaves organisation before period of 3 years he would pay x amount

3) there should be arbitration clause in bond executed by employee

Ajay Sethi
Advocate, Mumbai
87976 Answers
6207 Consultations

5.0 on 5.0

See you cannot restrain your employee for such long unreasonable time as under Indian contract act you cannot make any contract agreement in rastra in.of trade but responsable condition can be there so period of 1 to 2 years restriction can be there but.not.more then that.

Section 27 in The Indian Contract Act, 1872

27. Agreement in restraint of trade, void.—Every agreement by which any one is restrained from exercising a lawful profession, trade or business of any kind, is to that extent void. —Every agreement by which any one is restrained from exercising a lawful profession, trade or business of any kind, is to that extent void." Exception 1.—Saving of agreement not to carry on business of which goodwill is sold.—One who sells the goodwill of a business may agree with the buyer to refrain from carrying on a similar business, within specified local limits, so long as the buyer, or any person deriving title to the goodwill from him, carries on a like business therein, provided that such limits appear to the Court reasonable, regard being had to the nature of the business. 16 [*

Shubham Jhajharia
Advocate, Ahmedabad
25516 Answers
179 Consultations

5.0 on 5.0

1) Before providing them training on your knowledge of therapy you can ask each employees to sign a bond that they will not work or start any self employed business against you after leaving the company i.e. Your Ayurvedic Center. After leaving company atleast 5 years the can't work at any competitors or start any competitors business.

Ganesh Kadam
Advocate, Pune
12338 Answers
191 Consultations

4.9 on 5.0

Section 27 in The Indian Contract Act, 1872 bars such agreements or bond and the said section is reporduced below:

27. Agreement in restraint of trade, void.—Every agreement by which any one is restrained from exercising a lawful profession, trade or business of any kind, is to that extent void. —Every agreement by which any one is restrained from exercising a lawful profession, trade or business of any kind, is to that extent void."

So, even if you get such bonds executed, they cannot be enforced in any court of law.

Siddharth Jain
Advocate, New Delhi
5933 Answers
101 Consultations

5.0 on 5.0

Instead, you can get a non-compete clause in the agreement and it is enforceable too.

In contract law, a non-compete clause (often NCC), or covenant not to compete (CNC), is a clause under which one party (usually an employee) agrees not to enter into or start a similar profession or trade in competition against another party (usually the employer).

Siddharth Jain
Advocate, New Delhi
5933 Answers
101 Consultations

5.0 on 5.0

This is my response to you:

1. You will need to enforce a Non-compete clause in your bond;

2. You must know that, a ‘Restraint of Trade’ clause in a contract that is intended to not allow one party to practice a certain profession, trade or business is only valid under certain conditions of the given and is otherwise void as per Section 27 of The Indian Contract Act, 1872;

3. Here you can find such an agreement: https://www.indiafilings.com/sample-format/EMPLOYEE-NON-DISCLOSURE-NON-COMPETEAGREEMENT.pdf ;

Gowaal Padavi
Advocate, Mumbai
1920 Answers
5 Consultations

5.0 on 5.0

There is nothing wrong in it and you can go ahead with you Bond with your students if they agree to find any response and compensate you we agreed amount in case of any misuse just born can be signed notarized and register to avoid any legal complications in execution

Vimlesh Prasad Mishra
Advocate, Lucknow
6848 Answers
23 Consultations

4.9 on 5.0

I will draft the papers you need. Get signature of employees on this. Contact to adv.jaswantsinghkatariya at gmail.com

Jaswant Singh
Advocate, Gurugram
926 Answers
2 Consultations

4.8 on 5.0

Section 27 of the Contract Act provides that ‘every agreement by which anyone is restrained from exercising a lawful profession, trade or business of any kind, is to that extent void.’

Exception 1: Saving of agreement not to carry on business of which good will is sold - One who sells the goodwill of a business may agree with the buyer to refrain from carrying on a similar business, within specified local limits, so long as the buyer, or any person deriving title to the goodwill from him, carries on a like business therein, provided that such limits appear to the court reasonable, regard being had to the nature of the business.

Non-Disclosure of Confidential Information and Trade Secrets

The employee is mandated to take reasonable steps to keep all the confidential information in confidence except and to the extent when disclosure is mandatory under any law in force. The employee further agrees that he/she shall not discuss or disclose the confidential information of the company to any person or business unrelated to the company.

In Hi Tech Systems and Services Ltd. v. Suprabhat Ray,21 the Supreme Court restrained the respondents from acting as sales agent of other companies, saying that they had

acted in breach and they were in process of utilizing trade secrets and confidential information.

Information may be classified as a trade secret if such information is exclusively available to a particular business, is not available in the public domain, and allows that business to obtain an economic advantage over its competitors. Secret processes of manufacture, methods of construction, customer databases and business plans may constitute trade secrets.

Trade secrets enjoy protection of the law, both during and after termination of employment.

T Kalaiselvan
Advocate, Vellore
78133 Answers
1543 Consultations

5.0 on 5.0

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