How long should the agreement prohibit competition?

It is wise to limit the time frame as much as possible so as to not be overly burdensome on the promising party while still protecting the protected party's interests. Anything between three months and two years is generally accepted, depending upon what is reasonable under the circumstances.

For example, if the protected party operates in an industry that is rapidly changing, such as in the IT industry, then it will be hard to justify a non-compete term lasting longer than six months or a year. In most cases, if you include a non-compete term longer than two years, then you will be running a higher risk of a court someday shortening it down or invalidating it altogether.