1. Introduction
It is common for employers to include restrictive covenants in
employment contracts such as exclusivity, non-compete and
non-solicitation. The intent behind these covenants is to protect
employers by preventing employees from releasing sensitive
information, misusing business relationships or join competing
business while serving the employer. The challenge, however, lies
in balancing these covenants with employee's fundamental right
to pursue their profession. Under Section 27 of the Indian Contract
Act, 1872 , any agreement that is in restraint of exercising a
lawful profession, trade, or business is void except when it
reasonably restricts the employee from entering competition to
protect the interest of the employer's business. The sole
statutory exception is in the case of the sale of goodwill of a
business, where the seller may agree not to compete within
specified limits so that the buyer can benefit from the goodwill.
Beyond this, Indian
