Restrictive Covenants

Project on:

RESTRICTIVE COVENANTS

Course: Legal Aspects of Business

Course facilitator: C L Bansal

Presented by:

1. Pranshu Agarwal - 10P184

2. Anant Garg - 10P187

3. Arjun Menon - 10P192

4. Danish Arif – 10P195

5. Manan Patel -10P209

6. Mohit Bajaj – 10P212

ACKNOWLEDGEMENT

We whole heartedly thank Professor C L Bansal for inspiring us to take up this project and for making us proficient in the Legal Aspects of Business. We also thank the Computer Centre staff who helped us in the final stages of our project. A special mention must also be made of our class mates who were a constant source of encouragement.

CONTENTS

1. Restraint of trade

2. Non use of trade secrets

3. Non compete covenants

4. Non solicitation agreements

5. References

Restraint of Trade:

According to Section 27 of the Indian Contract Act, 1872, a contract restraining an individual from carrying on a lawful trade or profession is absolutely void. In course of time, the disadvantages of such a rigid rule were felt, since for example, apprentices were unable to learn the business, as no one was willing to teach them fearing possible rivalry. So, the law defeated its own purpose and it was gradually recognized that a general restraint might be bad; a partial restraint may be good. An example in this regard is: An agreement between a professional boxer and a manager-cum-promoter by which the boxer agreeing to participate in only the boxing matches arranged by the promoter and the promoter shall have the option of extending the initial period of contract by a further period of 3 years if the boxer achieved championship status, was held to be unreasonable amounting to restraint of trade. The attempts in all such cases must be to...