Trade Restricting Agreement Is Voidable

The delegitimization of a trade restriction agreement is explained by the history of the conflict between free markets and freedom of treaties. Guaranteeing freedom of contract would be tantamount to legitimize trade restriction agreements, which would lead the parties to agree to curb competition. According to Common Law, the current position stems from the case of: this was followed in Broad v Jolyffe[5] and Mitchel v Reynolds[6], where Lord Macclesfield asked: “What does it mean for a trader in London, what does another in Newcastle?” In these times of such slow communication and trade throughout the country, it seemed axiomatic that a general reluctance did not serve as a legitimate purpose for business and should be null. But as early as 1880, Lord Justice Fry declared in Roussillon v Roussillon[7] that an unlimited limitation in space was not useless, the real question being whether it went further than what was necessary to protect the promise. Thus, in the Nordenfelt case,[2] Lord Macnaghten decided that, although one may “not manufacture weapons or ammunition anywhere in the world”, “not compete with Maxim in any way” was an unreasonable restriction. This approach in England was confirmed by Mason`s House of Lords v The Provident Supply and Clothing Co. [8] Trade restrictions are a common law doctrine that relates to the applicability of contractual restrictions to freedom of enterprise. It is a precursor of modern competition law. In an ancient case of Mitchel`s leader vs. Reynolds (1711), Lord Smith told LC:[1] Customary law evolved with changing commercial conditions.

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