It should be noted that Section 27 of the Indian Contract Act, 1872 (Contract Act), provides that any agreement by which a person is deterred from practising a legal profession, a business the size of a trade or a business of any kind, is therefore non-bitter. The Indian courts have had differing views on the application of such a clause. It can therefore be concluded that the Indian courts, when dealing with non-competition clauses in the context of an employment contract, considered that the period of termination of employment was the one that followed the termination of employment. While the courts have been tolerant of the application of the non-competition clause, they have travelled an additional mile to ensure that such a clause will not have an effect after the termination of employment, and have decided that such a clause would fall within the disaster of Section 27 of the Contracts Act. Timing: During a business start-up agreement, there should be no waste of time and money to reduce costs and waste. Given the financial aspects of the business, it is very important to show concern at the moment of everything.2. Protection of the rights of minority shareholders: the appropriate framework should be put in place to protect the rights of minority shareholders. To avoid bad business strategies that affect minority shareholders.3. Legal advice: Each co-founder must understand the terms of the contract and use independent legal advice to act accordingly. The contract defines the rights of the company and the co-founder to terminate the contract.
The contract may be terminated at the end of a specific event, i.e. for reasons or without cause by a party or by mutual agreement between the parties. In addition, the agreement provides a clear mechanism for resolving disputes between the company and the co-founders on all the issues mentioned in the agreement, namely mediation, conciliation and arbitration. The parties agree on the legislation applicable to the agreement and the exclusive jurisdiction of the jurisdictions to which disputes may be considered in the framework of the agreement.