Covenants work to protect all parties involved in the contract, ensuring that each will hold up their end of the bargain. If they fail to do so, the other party will receive compensation or recover damages. Legal dictionaries spell out the importance of "performance" and "non-performance."

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When you’re buying a home, it is important to understand its restrictive covenants, because they dictate how you can and cannot use the property. restrictive covenants apply to a group of homes or lots — property that’s part of a specific development or subdivision. Restrictive covenants are normally put in place by the original developer.

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Generally speaking, your covenants protect the other owners in your subdivision. It’s the restrictions on their lot that protect you. Covenants are intended to create some standard of uniformity in communities.

Protective Covenants in a Non-Compete Agreement These agreements are increasingly commonplace, and there is good reason for this. One of the critical functions of a non-compete agreement is to specify how long your former employees must wait before seeking employment with a competitor or working in the field within a specified geographic perimeter.

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Covenants are most often used by planned developments such as gated communities, condominiums, and housing cooperatives to ensure a certain level of order and uniformity. The standards enforced through covenants often help the homes in the neighborhood retain their value because they tend to look much nicer and better maintained.