Business Law Case Study Provisions of Restraint of Trade

Added on - 21 Apr 2020

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Running head: BUSINESS LAWBusiness lawName of the StudentName of the UniversityAuthor Note
1BUSINESS LAWLegal areaThe case study is related to the provisions of Restraint of trade clause or restrictive covenants.IssueIn the given situation it has to be analyzed that whether the restrictive covenant which has beenimposed on Clare by Maddie can be enforced by law or notRuleAlthough restrictive covenant are used commonly they cannot be presumably be enforceable andvalid in law unless they are reasonable and have been incorporated to trigger legitimate interestof the business. The concept had been ruled by the case of Nordenfeldt v Maxim NordenfeldtGuns and Ammunition Company [1894] AC 535.The burden of proof lies on the parties which seeks to implement the restrictive covenant to showthat the clause dose not seek to provide more restraint that what is possibly required to protectthe legitimate interest of the business as provided by the case of Lindner v Murdock’s Garage(1950) 83 CLR 628.In the case of Stenhouse Australia v Phillips [1974] AC 391 it had been ruled that an employercannot incorporate a clause just to prevent the other from giving competition to the business.The legitimate interest of the business which the courts would be satisfied towards making arestrictive covenant includes the trade secrets and confidential information of the employer,clients and customer of the employer and the staff of the employer.
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