An agreement in restraint of trade is void". Examine this stateme

Question

An agreement in restraint of trade is void". Examine this statement mentioning exceptions, if any.

21 Feb 2025

Answer :

Word Count : 310

An agreement in restraint of trade refers to any contract that restricts a party from engaging in lawful trade, business, or profession. According to Section 27 of the Indian Contract Act, an agreement that restrains a person from exercising their trade or profession is void. The rationale behind this rule is that such agreements can restrict the individual's freedom and the free flow of commerce. Hence, public policy discourages clauses that unnecessarily limit competition or trade.

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