What are the restraints in trade and also explain its exceptions?
Exception 1 : Saving of agreement not to carry on business of which good will is sold – One who sells the goodwill of a business may agree with the buyer to refrain from carrying on a similar business, within specified local limits, so long as the buyer, or any person deriving title to the goodwill from him, carries on …
What is a restraint of trade clause UK?
Restraint of trade in England and the UK was and is defined as a legal contract between a buyer and a seller of a business, or between an employer and employee, that prevents the seller or employee from engaging in a similar business within a specified geographical area and within a specified period.
What is a restraint period?
A restraint clause will normally refer to both a geographical area and also to a time frame. For example, the clause may refer to the restraint period as being 12 months or 6 months or 3 months.
Is an agreement in restraint of trade and marriage valid?
1] Agreement in Restraint of Marriage Any agreement that restrains the marriage of a major (adult) is a void agreement. This does not apply to minors. But if an adult agrees for some consideration not to marry, such an agreement is expressly a void agreement according to the contract act.
What is the restraint of trade means?
A restraint of trade clause, typically found in an employment contract, provides that the employee, after termination of employment, be restrained from performing similar work or accepting future employment in competition with his current employer, usually for a certain period of time after his termination of …
What happens if I breach my restraint of trade clause?
Breaching a restraint of trade clause is primarily a breach of contract. If the court finds that the clause was unreasonable it will be considered invalid and you will not be bound by the clause. However, if the clause is deemed to have been reasonable and you are found to be in breach, there may be several possible consequences, one of which is an order to pay damages.
How enforceable are restraint of trade clauses in contracts?
A short answer: Restraint of trade clauses are enforceable to the extent that the restraint is reasonably necessary to protect the legitimate business interests of the employer. This is assessed on a case by case basis.
How does a restraint of trade clause work?
A restraint of trade clause, typically found in an employment contract, provides that the employee, after termination of employment, be restrained from performing similar work or accepting future employment in competition with his current employer, usually for a certain period of time after his termination of employment.
Are restraint of trade clauses enforceable in court?
Improperly drafted restraints of trade are often held to be unenforceable by the courts. For that reason it is important that businesses have an understanding of the basic considerations relating to these clauses and ensure that they are drafted by professionals to reflect the needs of the business.