Stopping you from trading? – Restraint of Trade Clauses: The Facts

What?
A clause available for use in corporate or commercial contracts, including:
–          Sale of business
–          Employment contracts
–          Exclusive supply contracts
–          Franchise agreements

Why?
It protects business interests by limiting competition, through restricting the freedom of a business or individual to pursue their trade for a finite period.

How?
Restraint of trade clauses are void and unenforceable unless:
–          They are designed to protect a legitimate business interest
–          They are no wider than reasonably necessary to protect that interest
–          They are not contrary to the public interest
These three principles must therefore be fulfilled in order to successfully use a restraint of trade clause in a contract.