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Contracts in Restraint of Trade
This is a contract through which a person voluntarily or unwillingly restricts his future liberty to carry at his trader business or profession in that manner or with persons as he chooses like e.g. an employer restraining for an employee from working to a business rival. At common law contracts in restraint of trade are prima facie void to being contrary to public policy. Conversely such a contract may be enforced it is proved as:
A. The restraint was reasonable to affected party and one is
B. The restraint was not injurious to the public.
C. The restraint was reasonably compulsory to protect the restraining party's attention
Explanatory statement - mergers and winding up: It is also necessary that the members or creditors who are to vote on the scheme should be able to understand its full effects.
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