Question: Does Restraint Of Trade Hold Up In Court?

How does the law treat a restraint of trade clause?

In New South Wales, however, the Restraints of Trade Act 1976 allows the Court to read down an otherwise unreasonable clause so that it is reasonable and enforceable.

Cascading restraint clauses provide alternative restraints in circumstances where a restraint is held to be unreasonable and unenforceable..

How long is a restraint of trade valid for in South Africa?

Under South African law, a restraint of trade is valid and enforceable, except when its enforcement would be contrary to public policy, in which case such a restraint of trade will not be upheld, either fully or in part.

What is unreasonable restraint of trade?

If the direct and necessary or natural effect of a contract or combination among producers and sellers of a commodity is to restrain competition and control prices to the injury of the public when all the powers of the contract or combination shall have been exercised, the contract or combination is in unreasonable …

Can my company sue me for going to a competitor?

A noncompete agreement is a contract, and if you break or “breach” it, your former employer can sue you for damages. … Your old employer may file a lawsuit against you alone if you started working for a competitor or started your own competing business.

Can an employer stop me from working for a competitor?

No matter what’s in your contract, your old employer can’t stop you taking a new job unless it could lose them money. For example if you might: take customers to your new employer when you leave. start a competing business in the same local area.

What is a reasonable restraint period?

Generally, non-solicitation clauses are easier to enforce than non-compete clauses. While there is no hard and fast rule, a reasonable restraint period (for non-solicitation) is often considered to be between three and 12 months after termination, subject to industry-specific and individual considerations.

The general rule is that restraint of trade clauses are unenforceable at common law. However, a court may decide to enforce a restraint of clause if it is considered to be reasonable, with reference to the interests of both parties, and it does not breach the public interest in free trade.

How enforceable is a restraint of trade?

The general principle remains that a restraint will only be enforceable if the employer is seeking to enforce the restraint has a legitimate proprietary interest worthy of protecting, the restraint is reasonable in as far as the geographical area and duration of the restraint are concerned, and the restraint is clear …

How do I get around restraint of trade?

You could potentially save a lot of time and money by following these steps:Obtain Legal Advice. Yes, this one sounds obvious. … Review the Clause Carefully. Restraints of trade are not a ‘black and white’ area of the law. … Don’t Confuse it With Other Contractual Clauses. … Advise Your New Employer.

What is contract in restraint of trade?

Contract in restraint of trade is a contract that states that a person selling a business agrees not to open a similar business within a particular distance of the business being sold and for a particular period.

Are post employment restrictions enforceable?

A post-employment restraint will only be enforceable by a court if it is considered reasonable in its scope and for the protection of the employer’s legitimate business interests.