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The restraint of trade doctrine is based on the two concepts of prohibiting agreements that run counter to public policy, unless the reasonableness of an agreement could be shown. A restraint of trade is simply some kind of agreed provision that is designed to restrain another's trade.
In Reddy v Siemens Telecommunications (Pty) Ltd, the Supreme Court of Appeal of South Africa upheld the enforceability of an agreement in restraint of trade.The unanimous judgment was handed down on 30 November 2006 and was written by Acting Judge of Appeal Frans Malan.
The Law on agreements in restraint of trade has changed as a result of this decision. Prior to the Magna Alloys case, South African courts have accepted that an agreement in restraint of trade is contrary to public policy and therefore void, unless it can be shown that the restraint is reasonable.
Addyston Pipe and Steel Co. v. United States, 175 U.S. 211 (1899), was a United States Supreme Court case in which the Court held that for a restraint of trade to be lawful, it must be ancillary to the main purpose of a lawful contract. A naked restraint on trade is unlawful; it is not a defense that the restraint is reasonable.
The court held that agreements in restraint of trade, voluntarily entered into pursuant to one's right to freedom to contract, are valid and enforceable unless the party seeking to escape this agreement can show that the agreement is unreasonable and therefore contrary to public policy.
An unreasonable restraint is severable, and the court enforced the amended agreement that Nordenfelt "for the next 25 years, would not make guns or ammunition anywhere in the world , and would not compete with Maxim in any way" thus permitting him to trade in those very items in direct competition with Maxim, illustrating the limited practical ...
Mitchel v Reynolds (1711) 1 PWms 181 is decision in the history of the law of restraint of trade, handed down in 1711 in England.It is generally cited for establishing the principle that reasonable restraints of trade, unlike unreasonable restraints of trade, are permissible and therefore enforceable and not a basis for civil or criminal liability.
The House of Lords held that the 5-year agreement was valid and the 21-year agreement was invalid. Lord Reid said he ‘would not attempt to define the dividing line between contracts which are and contracts which are not in restraint of trade’. It was preferable ‘to ascertain what were the legitimate interests of the [suppliers] which they were entitled to protect an