What Is an Anticontest Clause?

An Anticontest clause is a legal clause included in a contract which forbids a party from entering a competition or contest whereby they could potentially win a prize. By including an Anticontest clause in a contract, the employer is protecting themselves from an employee who may compete in a competition and win a prize, causing a conflict of interest for the employer.

When to Use an Anticontest Clause

Employers typically utilize an Anticontest clause when dealing with the hire of a party who may be involved in a competition, such as when a potential employee is a professional athlete or participates in speech contests. Employers may also include an Anticontest clause when creating contracts with independent contractors, to ensure that the contractor only creates or markets products that are within the context of the contract.

Are Anticontest Clauses Enforceable?

Whether an Anticontest clause is enforceable or not depends largely on state regulations. Restrictive covenants, such as an Anticontest clause, may be enforced if considered reasonable. In most cases, an Anticontest clause will be enforceable as long as it doesn’t prevent an employee from obtaining another source of income. Moreover, when it comes to contracts with contractors, Anticontest clauses are more likely to be enforceable.

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Examples of Anticontest Clauses

Here are three examples of Anticontest Clauses:

• The employee will not participate in any competition, contest or public display of skill involving any product or technology that is the same or similar to that of the company.
• The employee will not create, use, or attempt to commercialize any work or product which competes with the product or services offered by the Employer.
• The contractor shall not enter into any agreements with, or develop products for any person or company which competes directly or indirectly with the product or services offered by the Employer.

Related Legal Concepts

Understanding anticontest clauses often involves examining other restrictive contract provisions like severability clause and penalty clause structures. These clauses share similarities with no contest clause and in terrorem clause provisions, which also aim to discourage certain behaviors through contractual restrictions. Employment agreements frequently combine anticontest provisions with nondisparagement clause terms to create comprehensive protection for employers.

The Bottom Line

Anticontest clauses serve as contractual tools for employers to prevent conflicts of interest and protect business interests when employees or contractors might participate in competing activities. While their enforceability varies by state and must meet reasonableness standards, these provisions are generally more likely to be upheld when they don’t completely restrict someone’s ability to earn income. For guidance specific to your situation, always consult a qualified, licensed attorney.