Non Compete Clause In Services Agreements Under Brazilian Law

The restriction of the service provider's performance of activities to others including also competitors, after the end of the agreement is quite controversial and may be questioned given the principles laid down in the Federal Constitution, among them, for the sake of exemplification, the principle of free enterprise and the principle of freedom to perform any job or exercise any occupation.

Further, that provision may be questioned on the ground of lack of economic justification explaining/basing the need to prohibit the service provider from developing a similar activity for a third party, after the end of the agreement. In this regard, the other party may further argue: (i) disproportion between what it received in consideration of the services provision to contracting party...