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Arvind (Service)     07 August 2009

Service Agreement

I have been working for this company for last 3 years as Sr Manager - Marketing. No formal training has been provided by our company in its products as we are all well experienced in our field of work.Now I am asked to sign an agreement/ bond on a Rs 100 Non judicial stamp paper. One of the conditions of agreement is that I cannot work in any company having similar product lines for 3 years after I leave this company.

Similar agreements are to be signed by my colleagues also in the mktg dept. How legal and binding is such an agreement ?

 

 

 

 



Learning

 2 Replies

R.R. KRISHNAA (Legal Manager)     07 August 2009

Dear aravind.

This is common in every company nowadays.  These are done to keep the employees in control so that the employees do not look job in other companies.  This kind of agreements are common and there is no need to panic.  But such kind of agreements are legal and are binding. 

 

 

Kiran Kumar (Lawyer)     07 August 2009

Krishna is right...

 

such an agreement is not in restraint of service or trade....basically it is meant to secure the business secrets and skill etc. of the employer.

 

S. 27 of the Indian Contract Act has been interpreted in this direction.


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