Business Law Assignment: Contract Law and Restraint of Trade Analysis

This business law assignment analyzes two key areas of contract law: offer and acceptance, and restraint of trade clauses. The first section applies the judgment of Pharmaceutical Society v Boots to a scenario involving an advertisement as an invitation to treat, concluding that Rosella Ltd has the right to refuse a customer's offer. The second section delves into restraint of trade clauses, examining their enforceability based on reasonableness and public interest, including factors like bargaining power, duration, geographical extent, and consideration. It also discusses the application of restraint of trade clauses in employment contracts, emphasizing the need for reasonableness and the protection of employee rights. The assignment references key legal cases and scholarly articles to support its arguments.

Running head: BUSINESS LAW
Business Law
Name of the Student
Name of the University
Author Note

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1)
a) Applying the judgment of Pharmaceutical Society v Boots in the given scenario, where
it was stated that any product displayed with a certain price attached to it would not be sufficient
for the consideration of an offer but rather it would be an invitation to treat against which the
customer can make an offer which the shop-keeper has the right to accept or reject, it can be
advised to Rosella Ltd that they have the right of refusing Tom to sell the television for $200 as
the advertisement in the catalogue was a mere invitation to treat rather than an actual offer.
b) Under the contract law Rosella Ltd has the right to refuse the offer that Tom has made
for buying the television for $200 as the advertisement published by them was an invitation to
treat and they are not intended to be bound on the sellers as has been pointed out by the court in
the case Partridge v Crittenden.
As per the contract law no contract has been formed between Rosella Ltd and Tom. A
valid contract forms when there is an offer, acceptance, and consideration are made (Suff, 2013).
Here an offer was made by Tom to buy the television against the invitation to treat published by
Rosella, however, the offer was rejected by them. Hence it can be seen that the elements for a
successful contract was never fulfilled.
2)
a) The restraint of trade clauses are generally unenforceable if the court cannot be made
satisfied with its reasonability. The courts will consider two factors for the purpose of
considering the clause to be enforceable. Firstly, the clause needs to be reasonable. Secondly, it
should support the public interest (Nicholls 2015). It will consider the bargaining power
possessed by the parties involved. The duration of a restraint would also be considered while

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determining its reasonability. The geographical extent to which such a restraint prevails is also
an important factor. The consideration that has been conferred upon the seller will also be taken
into consideration. The custom prevailing in an industry would also be given due consideration.
However, main focus of the court is upon the circumstances of the case considering the recently
of the same (Grasso 2015).
b) The restraint of trade clause in an employment contract is inculcated for protecting the
interest of the employer after the conclusion of the term of employee in that employment. These
clauses can be a non-compete, non-solicitation, non-recruitment or confidentiality clause.
However for enforcing the same it needs to be established in the court that the clause has been
reasonably inculcated. The enforcement of restraint of trade clauses in employment contracts is
implemented after the conclusion of the employment. The first consideration made for the
reasonability of such clause is whether the clause has been oppressive over the employee
(Wilson and Allen 2018). A restraint of trade cannot be enforced if it is proved to be oppressive
over the employee upon whom it needs to be implemented. This needs to be construed as for two
contentions. Firstly the time span for which this has been implemented and secondly the
geographical extent to which this clause has been enforce upon the employee (Chia and Ramsay
2016).

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Reference
Chia, H. and Ramsay, I., 2016. Employment Restraints of Trade: An Empirical Study of
Australian Court Judgments. Australian Journal of Labour Law, 29(3), pp.283-304.
Grasso, M., 2015. Restraints of trade in common law contracts.
Nicholls, R., 2015. Restraints of trade: Tips and traps for enforceability. Proctor, The, 35(8),
p.14.
Partridge v Crittenden [1968] 1 WLR 1204
Pharmaceutical Society of Great Britain v Boots Cash Chemists [1953] 1 QB 401
Suff, M., 2013. Essential Contract Law. Routledge-Cavendish.
Wilson, J. and Allen, R., 2018. A game of snakes and ladders: Restraints of trade and ladder
clauses. Ethos: Official Publication of the Law Society of the Australian Capital Territory, (248),
p.24.