Restraint of trade refers to contractual provisions or agreements that restrict an individual’s ability to engage in certain trade or business activities after the termination of an employment or business relationship. These provisions may include non-compete clauses, non-solicitation agreements, and confidentiality obligations. Restraints of trade are intended to protect legitimate business interests, such as trade secrets, client relationships, and goodwill, but they must be reasonable in scope, duration, and geographic extent to be enforceable under the law. Courts typically assess the reasonableness of restraints of trade based on factors such as the parties’ bargaining power, the nature of the industry, and the potential impact on competition. Unreasonable restraints of trade may be deemed void or unenforceable.
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This glossary post was last updated: 29th March, 2024.
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