An undertaking not to compete is a clause often used in commercial contracts in industries where competition is fierce. The clause aims to prevent a partner company or employee from engaging in business with a competitor during the term of the contract. In some cases, the undertaking not to compete, also sometimes called a non-compete clause, may prevent competition even after the contract ends for a set period of time.
For example, a company that sells products to a distributor may want to include an undertaking not to compete in their agreement to prevent that distributor from selling similar products made by a competitor. This will keep the distributor loyal to the contract rather than attempting to pursue business from a competing company.
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