Restrictive covenants in a consultancy agreement

A restrictive covenant stops a consultant doing something after the engagement ends, and English law starts from the position that such restraints are void unless they go no further than necessary to protect a legitimate interest. Businesses copy wide covenants from employment contracts into consultancy agreements and find that they protect nothing; consultants sign them and find they are not bound. The drafting has to identify the interest, limit the restraint to it, and avoid the covenants that undermine the consultant's self-employed status. This page explains the law and the drafting. I draft consultancy and contractor agreements for a fixed fee of £595, delivered in five working days.

Who this is for

Businesses in England and Wales engaging consultants and contractors who want their clients, staff and information protected when the engagement ends, and consultants asked to sign covenants who want to know whether they will hold.

What matters in restrictive covenants

What a covenant may protect and what it may not

A post-termination restraint is enforceable only to the extent that it protects a legitimate business interest (client connections the consultant built or used, the stability of the workforce, confidential information and trade secrets) and goes no further than is reasonably necessary to do so; it may not protect the business from competition as such, and a covenant whose real purpose is to keep a skilled consultant out of the market fails. The agreement should identify the interest in the clause, because a court reads the covenant against that purpose.

Non-solicitation of clients and staff

A non-solicitation clause preventing the consultant from soliciting or dealing with clients the consultant worked with during a stated period before the end of the engagement, for a stated period after it, protects the client connection and is the covenant most likely to be enforced; it should be limited to clients and prospects the consultant had material dealings with, for a period reflecting how long the connection stays warm (a few months to a year, rarely more for a consultant), and should say whether dealing is covered as well as soliciting. A non-solicitation of the business's staff, limited to those the consultant worked with and to a reasonable period, protects the workforce.

Non-compete clauses and when they are enforceable

A non-compete that stops the consultant working for competitors or in the field for a period after the engagement is the hardest restraint to justify and the one most often struck out, because a non-solicitation usually protects the interest adequately; it is enforceable only where a non-solicitation would not suffice (the consultant holds information that would inevitably be used in competition, or client connections cannot be policed by a non-solicitation), and then only for a short period and within a defined scope. Against a self-employed consultant with other clients, a non-compete also undermines the status the agreement describes, and the agreement should rarely contain one.

Duration, scope and the test of reasonableness

Each covenant is tested as drafted: a court will not rewrite a covenant that is too wide, though it may sever a separate part that is unenforceable and leave the rest, and the agreement should therefore draft each restraint separately with its own period, scope and definition so that one failing does not take the others with it; the period runs from the end of the engagement, the scope is defined by the clients, staff, activities and area the interest requires, and the longer the period the narrower the scope must be.

Covenants during the engagement and the status question

During the engagement, the consultant may be required not to act for direct competitors, to disclose conflicts and to keep the client's information confidential, and those obligations are consistent with self-employment where they are limited to conflicts; an exclusivity that prevents the consultant working for anyone else, or a requirement to devote full time to the client, points to employment and should be avoided in an agreement that describes a self-employed engagement. Confidentiality survives the engagement without limit for trade secrets, which have their own protection under the Trade Secrets (Enforcement, etc.) Regulations 2018, and for a reasonable period for other confidential information, and does not need to be a restraint to be enforced.

Remedies and what happens when a covenant fails

A business enforcing a covenant seeks an injunction and damages, and a court will grant an injunction only for a covenant it is satisfied is reasonable, so the agreement should contain covenants the business can defend rather than the widest ones it can write; it should also provide for the consultant to notify prospective clients of the restraints, for the business to waive them in writing where it wishes, and for garden leave to be unavailable (a consultant cannot be put on garden leave in the employment sense, and the notice period is the only time the business can keep the consultant out of the market while paying). Where a covenant fails, confidentiality and the non-solicitation that survives are what remain, which is why they are drafted first.

What it costs

Consultancy or contractor agreement, £595. Drafted for your business. Five working days.

Template set for repeat use, £895. One master agreement plus a short-form schedule you can reuse for every engagement. Five working days.

Buying online forms the engagement on payment. The scope is what the consultancy and contractor agreements page describes, you accept the Terms of Service at checkout, and I email you within four working hours to get started. If you would rather ask something first, email me.

What you get

• A clear, express assignment of intellectual property to your business
• Confidentiality provisions that protect your business information
• Restrictive covenants drafted at a scope a court will uphold
• Clear treatment of status, so the arrangement is not accidentally something else
• Payment, deliverables and termination provisions that match how you work
• A reusable structure, so the next engagement costs you nothing

What is not included

• Employment status determinations and off-payroll working assessments, which need your accountant
• Tax advice
• Disputes with a contractor you have already engaged
• Immigration and right to work compliance

Questions I am often asked

Can we stop a consultant working for our competitors for a year after they leave?

Rarely. A non-compete needs a legitimate interest that a non-solicitation cannot protect, a short period and a narrow scope, and against a self-employed consultant it also undermines their status. The agreement protects clients, staff and information with covenants that will hold.

Our covenant says twelve months and the whole UK. Will it be enforced?

Probably not, unless the business can show that period and area are necessary to protect a specific interest. A court will not cut it down to something reasonable; it will strike it out. The agreement drafts each restraint at the width the interest justifies.

Do restrictive covenants in a consultancy agreement bind the consultant's company or the individual?

They should bind both: the company as the contracting party and the individual by a separate undertaking or guarantee. A covenant binding only the company is avoided by the individual engaging through another one.

Related guidance and services

• Consultancy and contractor agreements, £595, the service this page describes
• Contract review, £495
• Employment contracts and handbooks, £595
• Confidentiality in a consultancy agreement
• Notice and termination in a consultancy agreement

This page is general guidance for businesses in England and Wales, not advice on your own circumstances. Last reviewed: October 2026. Email geoffrey@caesar.co.uk.