by Coke as old common law. Partial restraint held good in 2 H. 5. common law; wherefore it may be doubted if any artificial explanation is wanted. It was resolved in the Ipswich Tailors' case (a) that at the common law no man could be prohibited from working in any lawful trade: and it was said that "The stat, of 5 Eliz. 4, which prohibits every person from using or exercising any craft mystery or occupation, unless he has been an apprentice by the space of seven years, was not enacted only to the intent that workmen should be skilful, but also that youth should not be nourished in idleness, but brought up and educated in lawful sciences and trades: and thereby it appears, that without an act of parliament (b) none can be prohibited from working in any lawful trade." And certain ordinances, by which the tailors of Ipswich forbade any one to exercise the trade of a tailor there until he had presented himself to the master and wardens and satisfied them of his qualification, were held void, inasmuch as "Ordinances for the good order and government of men of trades and mysteries are good, but not to restrain any one in his lawful mystery" (c). It seems certain that partial restraints were recognized as valid at an early time. This appears from the Dyer's case in 2 H. 5 (Pasch., fo. 5, pl. 26), which has been sometimes misunderstood. The action was debt on a bond conditioned that the defendant should not use his craft of a dyer in the same town with the plaintiff for half a year: a contract which would now be clearly good if made upon valuable consideration. The defence was that the condition had been performed. To this Hull, J. said: "To my mind you might have demurred to him that the obligation is void, because the condition is against the Common Law; and per Dieu (d) if the plaintiff were here (a) 11 Co. Rep. 53a, 54b. (b) So again in the case of Monopolies, ib. 876. (c) Cp. the case of the Clothworkers' Co. mentioned ib. 86b. (d) This expletive is not unique in the Year Books: nor is it, at that date, altogether conclusive (as modern writers assume) to show that the speaker had lost his temper. 29 Eliz., semble. he should go to prison till he had made fine to the King." But it does not appear that this dictum met with assent at the time, and the parties proceeded to issue on the question whether the condition had in fact been performed or not. Hull's opinion, however, was approved by all the Contra in Justices of the C. P. in a blacksmith's case in 29 Eliz. of which we have two reports (a). It does not appear in either case what was the real occasion or consideration of the contract. For aught the reports show it may well have been, and not improbably was, the ordinary transaction of a sale of good-will or the like in both the dyer's and the blacksmith's case. The contracts in partial restraint of trade which occur Contracts in partial in modern books are chiefly of the following kinds : restraint Agreements by the seller of a business not to compete in modern with the buyer. Agreements by a partner or retiring partner not to compete with the firm. Agreements by a servant or agent not to compete with his master or employer after his time of service or employment is over. It by no means follows, however, that an agreement in partial restraint of trade must fall within one of these descriptions in order to be valid. The rule established by the modern decisions is in effect as follows: times. An agreement not to carry on a particular trade or Rules as business is a valid contract if it satisfies the following conditions: to their validity. (i) It must be founded on a valuable consideration. (ii) The restriction must not go, as to its extent in space or otherwise, beyond what in the judgment of the Court is reasonably necessary for the protection of the other party, regard being had to the nature of the trade or business (b). It was at one time thought that the consideration must Conside (a) Moore 242, pl. 379, 2 Leo. 210. (b) See per Selwyn, L. J. Catt v. Tourle, 4 Ch. 659; and Leather Cloth ration. Limits of space. be not only valuable but adequate: but it is now clearly settled that this class of contracts forms no exception to the general rule. Here as elsewhere the Court will not inquire into the adequacy of the consideration. It is enough if a legal consideration of any value, however small, be shown (a). On the other hand the necessity of showing some consideration is not dispensed with, or the burden of proof shifted, by the contract being under seal. Until lately it was supposed to be an universal or at least a general rule that the restraint must not be unlimited as to space. But the doctrine of recent decisions is, or at least tends to be, that the real question is in every case whether the restriction imposed is commensurate with the benefit conferred. It has never been doubted that a partner may bind himself absolutely not to compete with the firm during the partnership: so may a servant in a trade bind himself absolutely not to compete with the master during his time of service (b). A contract not to divulge a trade secret need not be qualified, and a man who enters into such a contract may to the same extent bind himself not to carry on a manufacture which would involve disclosure of the process intended to be kept secret (c). And it has now been denied that the alleged rule as to limits of space exists, as a positive rule of law, in any class of cases (d). It seems, therefore, that the only rule which can be laid down in general terms is that the restriction must in the restriction particular case be reasonable. Whether it be so is a question not of fact but of law. What amounts of restriction have been held reasonable or not for the circumstances of different kinds of business is best seen in the tabular state General reasonableness of in particular cases. (a) Hitchcock v. Coker, 6 Ad. & E. 438 (Ex. Ch.) which also settles that a limit in time is not indispensable; Gravely v. Barnard, 18 Eq. 518. But it is a point to be considered in every case whether the provisions as to time are such as to make the agreement one that is not to be performed within a year, so that it must satisfy the requirements of s. 4 of the Statute of Frauds: see Davey v. Shannon, 4 Ex. D. 81. (b) Wallis v. Day, 2 M. & W. 273. (c) Leather Cloth Co. v. Lorsont, 9 Eq. 345, 353. (d) Rousillon v. Rousillon, 14 Ch. D. 351, 366 (Fry, J.), dissenting from Allsopp v. Wheatcroft, 15 Eq. 59 (Wickens, V.C.) ment of cases (down to 1854) subjoined to the report of Avery v. Langford (a). It may be convenient to add the later decisions in the same form. 1856. Jones v. Manufacture Lecs, 1 H. & N. 189, 26 L. J. Ex. 9. 21 years from de- 21 miles from Avery v. naging clerk to plaintiff. or Continuance of de- England? (not li- tion. 1875. Printing & Agreement by Lifetime of ven- Europe. Numerical Re the vendor of patent dors. gistering Co. v. Sampson, 19 Eq. 462. 1879. Davey v. Outfitter and Unlimited (taken Five miles from Shannon, 4 Ex. tailor. by the Court as Devonport. plaintiff and de fendant). Two years after Unlimited. account. (a) See p. 332 above. |