Agreement In Restraint Of A Trade

Under Section 26 of the Indian Contract Act, all agreements restricting marriage, with the exception of a minor, are unhinged. The Romans were the first to delegitimize agreements that respected marriage. The basis of the marriage limitation agreements, which are null and void, is that marriage is a sacrament and that nothing should encroach on the institution of marriage, not even treaties. The idea behind this provision is not to deprive everyone of the personal right to marry someone of their choice. It is important to note here that, according to the section, agreements limiting the marriage of a minor are not invalid. With regard to the meaning of the term “trade” in the second sub-question, it should be noted that trade must be understood as a whole, so that it is not limited to a specific skilled occupation, but applies to employment in general. The delegitimization of a trade agreement is part of the history of the conflict between free markets and contractual freedom. Guaranteeing contractual freedom would be tantamount to legitimizeing trade restriction agreements, which would lead the parties to agree to limit competition. Under common law, the current position arises from the case of commercial doctrine- The restriction of trade doctrine is based on the two concepts of prohibition of agreements contrary to public policy, unless the relevance of an agreement can be demonstrated. A trade restriction is simply a kind of agreed provision that aims to curb the trade of another.

In Nordenfelt v Maxim, Nordenfelt Guns and Ammunition Co[2], for example, a Swedish arms inventor, by selling his business to an American arms manufacturer, promised that he would “not manufacture weapons or ammunition anywhere in the world and would in no way compete with Maxim.” It is only when it appears that the doctrine of trade restriction is applicable that the employer must demonstrate a legitimate interest in property that must be protected and that the two tensions between contractual freedom and commercial freedom must be balanced. The Partnership Act of 1932 provides another exception to the rule limiting trade restriction agreements. There are three exceptions in the law.