Inducement
An employee may have knowingly and willingly accepted a restraint in
order to take on the post, and may have agreed to accept a fincancial
incentive in return for the restraint. If this takes place with an employee
who is not especially vulnerable, and therefore freely negotiated, the court
will uphold the restraint.
Exclusive dealing arrangements
If an exclusive dealing arrangements exist, for example where an employee
or a contractor forms an agreement only to work for one particular person,
or to supply or take supplies from one business (sometimes known as solus
arrangements), this arrangement must be shown to be reasonable.
204 Contract law
- The starting point is to view a restraint of trade clause as void, and
then to place the burden on to the party seeking to enforce it to show
that it is valid. - In order to show this there must be evidence that the restraint is
reasonable in two ways: (a) between the parties and (b) regarding the
public interest (the general good of the public). Cases will vary
according to their own facts in showing this. - The courts will uphold a restraint if it protects a legitimate interest.
Allied Dunbar v Weisinger (1988)
An employee agreed not to work in the field of insurance for two years
following his current employment and in return received two years’
additional salary by way of compensation. The court upheld this restraint.Schroeder Music v Macaulay (1974)
A wide restraint on a songwriter, which was formed when the writer
was new to the business, young and unknown, and therefore in a
vulnerable position with little bargaining power, was held to be
unreasonable in still restricting freedom when the writer was more
established and successful.Aylesbury FC v Watford AFC (1977)
Lee Cook, a 17 year old footballer, was contracted to Aylesbury but
allowed to treat the contract as not binding on him so that he could
form a new contract to play for Watford. A restraint of trade clause in
his original contract was held to be too onerous on a young, vulnerable
and relatively new player.