The non-compete agreement in the agency contract

José Maria Serrão

Keywords

Agency; non-compete agreement; offer; consideration; equity; penal clause; geographical area.

Abstract

Decree-Law no. 178/86, of July 3rd, amended by Decree-Law no. 118/93, of April 13th, contains the rules that discipline the contract and the relationship of agency in the Portuguese legal system. In this short paper, we will approach some problems that have been given rise in the our courts, such as: the (in)validity of the non-compete agreement that the agent commits himself to as soon as his contract with the principal comes to an end, but in which the value of the monetary compensation is not, from the start, agreed upon; the legality of apposing a penal clause in the event the agent breaches his non-compete agreement; and the criteria that should determine the geographical area that limits the non-compete agreement.