A Restraint Of Trade Agreement That Is Unreasonable Is Regarded As Lawful Valid And Binding

The Tribunal stated in Reddy/Siemens [2006] SCA 164 that “the material right, as provided in Magna Alloys, is that a restriction is enforceable, unless it proves inappropriate, which necessarily places a constraint on the person attempting to escape it.” In noting the adequacy, the Tribunal considers the public interest that requires the parties to respect their contractual obligations, contrary to the interests of society, which allows individuals to act freely and to be employed in the profession of their choice. An employer could argue that if its protective interest were to be in the hands of a competitor, the loss it would suffer could not be quantified, which would mean that a claim for damages would not constitute a satisfactory remedy. The effects of the limitation of commercial enterprises on former workers of a business are therefore potentially quite damaging and have been invoked to prevent reluctant persons from exercising their constitutional rights to choose their profession, activity or profession. With respect to whether the deference was appropriate with respect to the interests of the parties and the public, the Tribunal would generally consider factors such as the length of the restriction and the geographic scope of the clause in question. In the case of Mano Vikrant Singh/Cargill TSF Asia Pte Ltd (8), the Singapore Supreme Court found the clause in question to be inappropriate and therefore unenforceable for the following reasons. First, the term clause was longer than necessary. The non-competition agreement limited trade only for one year, while the clause covered a two-year period. There was no compelling reason why the legitimate interest of the ownership business requires protection beyond the period for which it has already been protected under the non-competition agreement. Second, the clause has no geographical limit, while the restriction under the non-competition ban is limited to countries where the company has a real place of activity. Finally, the clause included employment and advice to any organization that competed for employees, customers, customers, market shares or resources and financial/merchandise transactions. It was not limited to the activities of the business and was therefore broader than necessary to preserve the defendant`s legitimate interest in ownership. The general principle remains that a restriction is enforceable only if the employer attempts to impose the restriction, has a legitimate interest in property worthy of protection, that the restriction on the geographical area and duration of the restriction is appropriate and that the limitation is clear in its meaning and application. A related question is whether, even if a deduction is necessary and incidentally necessary, there are ways available to achieve the desired result, which is less damaging.

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