Contractual Restraints of Trade

All contractual restraints of trade are presumed to be void for reasons of public policy

 Reasonable as between the parties  Onus is on the promisee  Injurious to the public  Onus is on the promisor

There can of course be a problem with excessive reliance on decided cases. The question of validity of a covenant in restraint of trade (including, in this, a covenant against solicitation of the covenantee’s customers or clients) is not really a question of law. Decided cases state the relevant principles, and may prove useful, indeed valuable, guidance as to their application in particular factual circumstances. But the validity of a covenant in restraint of trade is to be assessed having regard to the terms of the particular covenant and the facts of the particular case. Stacks/Taree Pty Ltd v Marshall [No 2]

 Fiduciary duties  Corporations Act 2001  Implied duties  Equitable protection of confidential information

 Legitimate interest of employer  Circumstances of the employee  Extent of restraint

 Restraint from Competing/Working for Competitor  Restraint against Poaching Employees  Restraint against Poaching Customers  Restraint against using information

The goodwill of a business is immune from the danger of the owner exercising his personal knowledge and skill to its detriment, and if the purchaser is to take over such goodwill with all its advantages it must, in his hands, remain similarly immune. Without, therefore, a covenant on the part of the vendor against competition, a purchaser would not get what he is contracting to buy, nor could the vendor give what he is intending to sell. Herbert Morris Ltd v Saxelby

 Identify goodwill  Geographical restraints  Temporal restraints  Other restraints

 Identify Legitimate Interests  Consider Activities to be Restrained  Identify Elements with Precision  Severance  Cascading Clauses  Acknowledging Reasonableness  In Addition to Other Rights