Title:
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The restraint of trade doctrine in England, Scotland and South Africa, with specific reference to post-employment, sale of business and post-partnership restraints
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The restraint of trade doctrine as understood here developed in English law but it was transplanted to England and Scotland. The two mixed legal systems closely followed English law. In Scotland a separate jurisprudence has only recently developed in this area. In South Africa attempts have been made to distinguish the English doctrine. But it has remained fundamentally in tact. That does not mean that the three systems are merely carbon copies of one another. Yet differences are subtle. An attempt is made to analyse the doctrine from broad principles although it is difficult. The doctrine has always worked in practice but it produces nice theoretical problems. It is here submitted that the public policy value of freedom of work should be the most important tenet couching the doctrine. Only clauses that offend against this fundamental principle should be investigated in terms of the doctrine. Only when the courts find that the interference with freedom of work can not be justified should clauses be struck down. Answers to the question when will a clause be unacceptable for being in restraint of trade are developed against the backdrop of freedom of work. Only the classical restraints i.e. post-employment, sale of goodwill and post-partnership restraints are discussed. These cases stand quite separate from most other restraints because they operate after termination of a work or production relationship and because they have generated a vast corpus of cases. The reasonableness inter partes test and the direct impact of public interest is analysed. Most importantly, it is argued that the public policy restraint of trade doctrine operates on two levels. The question whether the restraint is no wider than the legitimate interests of the covenantee makes or breaks a case. But many other aspects are also considered in filling the vacuums left by the severe difficulties of applying facts to law in this area of public policy.
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