What is it?
Prohibited is a contractual and regulatory term that defines activities or actions that are explicitly forbidden. It governs conduct and establishes boundaries for acceptable behavior in legal relationships.
prohibited
Contract LawLegal glossary term
Quick answer
Prohibited usually means explicitly forbidden by agreement or law. In contracts, it matters because violations can lead to termination or liability. Before signing, check the scope and exceptions to prohibited activities.
Definitions
What is prohibited?
Legal Definition
Prohibited actions are those explicitly forbidden by law, regulation, or contract terms. Violating these provisions can lead to contract termination, legal liability, or regulatory penalties. The specific consequences depend on whether the prohibition appears in statute, regulation, or private agreement.
Plain-English Translation
Like being told not to eat cookies before dinner, prohibited activities are actions you've been explicitly forbidden from doing. Crossing these lines can result in losing privileges or facing consequences.
Contract relevance
Why prohibited matters in contracts
Ignoring prohibited clauses can result in contract termination, breach of claims, or regulatory sanctions. The party engaging in prohibited activity bears the risk of liability and potential damages.
Document context
Where prohibited appears in documents
| Document type | Section | Why it matters |
|---|---|---|
| Non-compete agreement | Restricted activities clause | Defines competitive limitations |
| Franchise agreement | Operations manual | Outlines prohibited business activities |
| Lease agreement | Use restrictions | Prevents prohibited property uses |
| Intellectual property license | Permitted use section | Limits how licensed material can be used |
| Government regulations | Compliance requirements | Establishes prohibited conduct for businesses |
| Employment contract | Confidentiality provisions | Defines prohibited disclosure of information |
Contract language
Common contract wording
| Contract wording | Plain-English meaning | What to check |
|---|---|---|
| The Licensee is prohibited from sublicensing the software | You can't rent or sell our software to others | Check if there are exceptions for certain business partners |
| Employees are prohibited from disclosing confidential information | Workers can't share trade secrets or customer lists | Verify what information qualifies as confidential |
| The contractor is prohibited from subcontracting work | You can't hire others to do your assigned work | Determine if prior written approval can be obtained |
Red flags
Red flags to watch for
Wording examples
Clearer wording examples
Vague wording
Prohibited activities
Clearer wording
Activities specifically prohibited include: [list examples]
Vague wording
Competitor activities are prohibited
Clearer wording
The Licensee may not engage in business with companies that compete in [specific markets] for [time period]
Vague wording
Confidential information shall be prohibited from disclosure
Clearer wording
Confidential information as defined in Section X may not be disclosed to third parties without written consent
Note: “clearer” means easier to read — not legally reviewed or guaranteed safe.
Pre-signature checklist
What to check before signing
1
Identify all specific activities listed as prohibited
2
Determine if time limits apply to the prohibition
3
Check if geographic restrictions are included
4
Verify exceptions or carve-outs to the prohibition
5
Assess whether the prohibition is reasonable in scope
6
Determine if prior written approval can override the prohibition
7
Check if penalties for violations are clearly stated
Party impact
How prohibited affects each party
| Party | What this party should check |
|---|---|
| Licensor | Verify prohibited activities are clearly defined and reasonable |
| Licensee | Check if exceptions exist for normal business operations |
| Employer | Ensure prohibited activities are truly protectable business interests |
| Employee | Confirm prohibited activities don't limit legitimate career opportunities |
| Landlord | Verify prohibited uses align with property type and zoning |
| Tenant | Check if prohibited uses include standard business practices |
Comparison
prohibited vs similar terms
| Related term | Plain meaning | Main difference from prohibited |
|---|---|---|
| Restricted | Limited but not entirely forbidden | Restricted activities may have conditions for approval |
| Conditional | Permitted only if certain requirements are met | Conditional activities are allowed with permission |
| Permitted | Explicitly allowed | Permitted activities are expressly authorized, unlike prohibited ones |
| Banned | Completely forbidden with no exceptions | Banned is stronger than prohibited, often with no possibility of approval |
| Prohibited use | Specific application of prohibited term | Prohibited use focuses on how something can be used, not whether it exists |
Missing or vague
If prohibited is missing or vague
If 'prohibited' is undefined in a contract, parties may disagree about which activities are actually forbidden. This ambiguity can lead to disputes over whether a particular action constitutes a violation. Courts may interpret the term based on industry customs or the contract's purpose, potentially leading to inconsistent outcomes. The lack of clarity may result in one party being held liable for conduct they reasonably believed was acceptable.
Document map
Document section map
| Contract section | What to inspect |
|---|---|
| Definitions | Check for specific definitions of prohibited activities |
| Restrictive covenants | Review all limitations on conduct |
| Compliance requirements | Verify prohibited regulatory violations |
| Termination clauses | Check consequences of prohibited activities |
| Remedies section | Understand available remedies for violations |
| Governing law | Determine if state law affects enforceability |
Visual model
Understand prohibited fast
An explainer image has not been generated for this term yet.
01
Franchisee | Operating a competing business during the franchise term | Termination of franchise agreement and damages
02
Employee | Soliciting clients after leaving the company | Lawsuit for breach of non-solicitation clause
03
Contractor | Subcontracting without written permission | Breach of contract and financial penalties
Document context
How prohibited shows up in legal documents
Why does it matter?
Ignoring prohibited clauses can result in contract termination, breach of claims, or regulatory sanctions. The party engaging in prohibited activity bears the risk of liability and potential damages.
When does it matter?
Prohibited clauses become enforceable when a party engages in the specified forbidden activity. Within 30 days of discovering a prohibited action, the non-breaching party may seek remedies.
Where is it usually seen?
Prohibited clauses appear in non-compete agreements, confidentiality provisions, and regulatory compliance documents. They are standard in franchise agreements and intellectual property licenses.
Who is affected?
Employees face restrictions from working for competitors under prohibited non-compete clauses. Licensees risk termination if they engage in prohibited activities with licensed intellectual property.
How does it work?
First, a contract must clearly define prohibited activities with specific limitations. Then, if a party engages in such activities, the other party must provide written notice within a specified timeframe. Finally, the aggrieved party may pursue remedies ranging from injunctive relief to damages.
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Wikipedia
External reference for prohibited
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Where prohibited connects to real contract work
This layer links the term to nearby glossary entries, document use cases, and contract-risk guides so readers can move from definition to context without dead ends.
Glossary
Use Cases
NDA
Legal & Corporate: Signing an NDA is easy. Understanding what you just agreed never to say is harder.
Check Nda Risks
NDAs & Confidentiality: Check a NDA (Confidentiality Agreement) for common risks and hidden one-sided clauses.
Nda Risk Checker
NDAs & Confidentiality: Check a NDA (Confidentiality Agreement) for common risks and hidden one-sided clauses.
Source & disclosure
This page is an AI-assisted plain-English explanation based on LexPredict Legal Dictionary context and contract-review patterns. It is not legal advice. Meaning may vary by jurisdiction, industry, and exact clause wording.
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