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Under Texas law, the covenant not to compete must be supported by valid consideration. Also, the restrictions must be reasonable. Thus, while binding an independent contractor is possible under the Texas noncompete statute, the usual statutory requirements must be observed.
While it is difficult to place a specific value on a noncompete agreement, value can be assigned during purchase accounting. Any noncompete agreement would be amortized over the economic life of the agreement.
Independent contractors in Texas, and those who hire them, often wonder whether independent contractors can be bound by a non-compete agreement under Texas Law. The answer is yes. In Texas, there is no prohibition against binding an independent contractor to a non-compete agreement.
Covenant Not to Compete. You agree that at no time during the term of your employment with the Company will you engage in any business activity which is competitive with the Company nor work for any company which competes with the Company.
Will the contractor service other clients? An exclusive relationship is an extremely strong indicator that the contractor is really an employee. In a genuine contractor relationship, the contractor is permitted to market to and service other customers?including the company's competitors.