The word competitive is routinely misused in contracts. That comes as no surprise, given that it’s routinely misused in legal and business writing generally.
Competitive means (1) of, involving, or based on competition and (2) likely to succeed in competition.
In the following contract provision, competitive is used to express the first meaning:
Executive acknowledges the highly competitive nature of the business of the Company.
And in the following contract provision, it’s used, albeit a little awkwardly, to express the second meaning:
Customer shall give VEM every opportunity to be included on Approved Vendor Lists for materials and components that VEM can supply, and if VEM is competitive with other suppliers with respect to reasonable and unbiased criteria for acceptance established by Customer, VEM shall be included on such Approved Vendor Lists.
But competitive is also used in contexts where the adjective competing or the verb to compete would be a better fit:
For purposes of this Agreement, the term “Competitive [read Competing] Business” means any business that is similar to or competitive [read competes] with the business of the Company with respect to which Executive has had direct responsibility.
Does this matter? Not particularly, as it’s unlikely that any misunderstanding would result. But it would cause the discerning reader to raise a quizzical eyebrow. For all its flaws, contract language is relatively free of corporate jargon. Disciplined use of competitive would help keep it that way.