Introduction

When you acquire a company, you are not just buying shares or assets. You are buying relationships, know‑how, and key talent. These intangible assets are what make the deal worth it. But without the right safeguards, they can disappear the day after closing. That is why your SPA must secure value drivers through non‑compete and non‑solicitation, assignment confirmations for IP, chain‑of‑title checks, change‑of‑control consents for key contracts, data‑transfer compliance, and retention plans for critical employees.

Some definitions

Non-Compete Clause

A non-compete clause in an SPA is a contractual provision that prevents the seller (or key individuals associated with the seller) from starting, joining, or assisting a competing business for a defined period and within a specified geographic area after the sale. The aim is to protect the buyer from the risk that the seller could use their knowledge, relationships, or reputation to undermine the value of the business just acquired. Non-compete clauses are typically tailored to the industry and market, and their scope (duration, geography, activities restricted) must be reasonable to be enforceable under local law.

Key features:

- Prohibits direct or indirect competition with the sold business.

- Applies for a set period (often 2–3 years) and within a defined region.

- May include exceptions for passive investments or unrelated activities.

- Enforceability depends on reasonableness and local legal standards.

Non-Solicitation Clause

A non-solicitation clause in an SPA prevents the seller from actively seeking to lure away (or “solicit”) key employees, customers, suppliers, or other business partners of the company after the sale. This protection is crucial for the buyer, as the value of the business often depends on its people and relationships. Non-solicitation clauses help ensure continuity and stability during the critical post-acquisition period.

Key features:

- Prohibits the seller from approaching or hiring former employees for a set period.

- Prevents the seller from soliciting or enticing away customers, suppliers, or partners.

- Typically applies for a similar duration as the non-compete clause.

- May include carve-outs for general advertising or pre-existing relationships.

Why these clauses matter

Imagine paying millions for a business only to see the seller launch a competing company, poach your best employees, or divert your top clients. It happens more often than you think. These clauses protect continuity and preserve the value you paid for. They are not optional, they are strategic.

What they should cover

A strong SPA should prevent the seller from:

- Launching or joining a competing business

- Poaching key employees

- Diverting clients, prospects, or partners

Without these protections, the intangible value you acquired can vanish overnight.

Drafting tips for enforceable clauses

To make these clauses effective and compliant:

- Scope and duration: Keep them proportionate to legitimate interests and market realities.

- Clear definition of activities: Avoid overly broad wording that risks nullity.

- Anti-circumvention: Block indirect participation or use of proxies.

- Sanctions: Include strong, dissuasive penalties for breaches.

- Consistency: Align with other non-compete obligations to avoid contradictions.

Balanced clauses protect continuity while respecting legal standards. They are the difference between a secure deal and a costly mistake.

The dups approach

At dups, we do not just draft clauses, we negotiate them with a strategic lens. Our boutique M&A team combines legal and financial expertise under one roof, ensuring your SPA protects what truly matters. We sit next to entrepreneurs, anticipate risks, and deliver clarity under pressure. Whether you are acquiring or preparing for a sale, we make sure your deal safeguards every euro of value.

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