Any action which damages or hinders in some way a personâ€(tm)s opportunity to carry on a business, or a provision in a contract which restrains a former employee for working for a competing business. Restraints of trade are illegal unless the restraint is in writing and is reasonable.
Monopolies, combinations, and contracts that impede free competition.
this is seen as against public policy and the courts will not enforce contracts that seek to restrict trade. Agreements between large organisations to this effect are deemed cartels and these are investigated by the competition commission.
Most franchise agreements contain such a clause. It means that the franchisee is not permitted to operate in opposition to the network, usually for a specific period and within certain boundaries. This clause is legally enforceable only if it is reasonable, both to its extent and duration.
Restraint of trade is a restriction on a person's freedom to conduct business in a specified or unspecified location for a specified or unspecified length of time. Such restrictions are normally enacted by contracts. Generally however, such contracts are void on the ground of illegality, and cannot be enforceable unless they are reasonable in the interests of both contracting parties and of the public at large (Nordenfelt v Maxim Nordenfelt Guns and Ammunition Co [1894] AC 535).