“Agreement to restrict trade, nullig – Any agreement by which a person is deterred from practising any profession, activity or legal activity of any kind is therefore non-concluding. One of the principles is that a gentleman does not have the right to prevent his prime contractor from participating in the competition after the termination of the employment relationship, but that he is entitled to adequate protection against the exploitation of trade secrets. In Mason v. Provident Clothing Co, Lords did not allow an employer to hold its screen for a period of three years after the end of its service. Viscount HALDANE LC stressed that advertising capacity is a natural gift and is not due to specific employer training. If they had merely asked him not to attach himself to canvases in the area where he had actually contributed to the construction of the business will, or in a field limited to places where the knowledge acquired in his employment might have become accustomed to their prejudices, they might have been able to secure a right to hold him within those limits. On the other side, at Fitch v. The House of Lords authorized an alliance that allowed a lawyer to operate within 7 miles of the city, which was reasonably necessary to protect the interests of both parties. But under no circumstances would the court allow alliances against competitions. In Attwood v.
Lamont the employer has headed several departments related to sewing, etc. And the employee was just the superintendent of sewing. The agreement with him was that after the termination of his activity as an employee, he would not commit within 10 miles in any of the stores run by the employer in addition to sewing. The Court of Appeal found that the agreement was not only contrary to nature, but also a restriction of competition. Mr. YOUNGER LJ quoted the following passage from LORD PRAKER`s speech in Morris v. Saxelby. The reason and the only reason for maintaining such a worker`s reluctance is that the employer has a certain right of decency, whether in the nature of the business context or in the nature of trade secrets, to protect such restrictions, is reasonably necessary, given a worker`s obligations. Such deference has never been maintained when it is intended solely to prevent competition or to oppose the exploitation of the personal skills and knowledge acquired by the worker in his employer`s business. CONCLUSION; In its 13th report of 1958, the Law Commission of India strongly recommended amending Section 27, as its restrictions on Indian businesses and contracts are commercially undesirable.
More than five decades after this report, and in the face of the legislature`s refusal to accept the Law Commission`s recommendation, it appears that a change is not the only way to make India`s position on trade restraint commercially reasonable and that the law, in its current form, also authorizes and imposes a “common sense inquiry”.. Whenever the issue of trade restriction appears in the Indian context, the first thing that is emphasized is that the Indian position differs from the common law by excluding any adequacy study.