The reasons alleged were: the disregard of the social interest in the freedom of individuals to enter whatever business they pleased; the mischief to the party by the loss of his livelihood and the subsistence of his family; the mischief to the public by depriving it of a useful member; and the tendency toward monopoly. The last would seem to be negligible. Today, such is the freedom and ease of transportation and of entering other occupations and businesses that the danger of the loss of livelihood and subsistence for a family is not such as to cause great concern. The same changes make it less likely, than formerly, that the public will feel the loss of the service of any of its members.2 But the social interest in all being free to enter whatever business they please is still so far operative that the mere contract to refrain from carrying on a business or occupation will be void.

This last consideration would, it is believed, be sufficient to invalidate the contract even though the promisor had not at the

2-Herreshoff v. Boutineau, 17 R. I. 3, 6 (1890) (quotation given post 7 note 13).

But see Kellogg v. Larkin, 3 Pinn. (Wis.) 123 (1851) [151] ("The loss to society of a valuable member is as great a public injury now as it ever was, and as great here as anywhere. I hope, indeed, that the market value of a human being is higher now than it was in England at the beginning of the eighteenth century, when the case of Mitchel v. Reynolds was decided. The capacity of an individual to produce (using that word in its largest sense) constitutes his value to the public. That branch of industry in which a man has been educated, and to which he is accustomed, and for the abandonment of which he demands compensation, is supposed to be the one in which he can render the greatest

profit. The value of what he produces belongs to himself. The actual product belongs immediately to him who employs him, but mediately to the state, and goes to swell the aggregate of public wealth. Therefore, the law says to each and every tradesman: You shall not, for a present sum in hand, alien your right to pursue that calling by which you can produce the most and add the most to the public wealth, and compel yourself to a life of supineness and inaction, or to labor in some department less profitable to the state. And if any man, mindful of his own gain alone, but not of the public good, will bargain with you to that effect you are held discharged from such bargain because of the advantage that will arise to the public from so holding.")

time of his promise entered any business or occupation at all, and was not contemplating doing so.

The above conclusions presuppose the fact that the business is one which the public is interested in having carried on. If the business or occupation is one which, while lawful, is regarded as contrary to the public interest, such as the liquor business, it has been held that the mere contract to refrain from entering or carrying on such a business is valid.3

SECTION 2

RESTRICTIVE CONTRACTS ACCOMPANYING THE PROMISOR'S ENTRY INTO AN APPRENTICESHIP ARRANGEMENT, OR MADE UPON HIS ENTRY INTO THE SERVICE OF THE PROMISEE FOR THE PURPOSE OF LEARNING A TRADE OR BUSINESS

82. We have the following possible considerations against the validity of such covenants: The social interest in the freedom of individuals to enter what business they please is violated. The contract tends to deprive the promisor of his livelihood, the public of a useful member, and to eliminate competition between the promisor and the promisee. On the other side we have the desirability of permitting the teaching of apprentices or employees by masters. This involves providing the means whereby they may obtain their instruction on the best terms possible. The apprentice must purchase the instruction. Practically, the easiest way for him to do it is to give his services in part payment and a covenant not to compete in lieu of the balance. If the covenant not to compete is not allowed, the apprentice or employee must pay cash on the basis that the master is training a competitor. The result would be poor instruction and a price which an apprentice or employee would find difficulty in meeting. If the restriction is not broader than the business of the master, the apprentice would have a large territory in which to carry on the trade or business which he has learned, and other

3-Harrison v. Lockhart, 25 Ind.

112 (1865); McAlister v. Howell, 42 Ind. 15 (1865).

apprentices learning the same trade in other districts could come into the district of the master and there compete with him.

Upon a balancing of the interests, it is clear that where the restriction given by the apprentice or employee is not broader than the master's business, it is valid.4

§3. Nor is it any objection to the restriction that it is to continue for the life of the promisor, and hence may continue after the master has died or gone out of business.5 The contract is still an asset of the master's estate after he is dead or when he sells his business or takes in a partner. Where he has abandoned his business, equity would no longer give an injunction, and the damages at law would be nominal.

§ 4. Formerly it was said that the consideration must be good and adequate, so as to make it a proper and useful contract. The. later view is that a legal consideration which is also of some value must be given. But apparently the court will not undertake to weigh the value of the consideration against what is given in order to determine its adequacy.7

§ 5. Suppose, however, that a country-wide business should exact such restrictive covenants of all employees entering the business or of all persons entering the business in any executive capacity, so that they would have no choice but to stay or change their occupation completely. Would not the balance of considerations be against supporting the validity of such arrangements? Here the loss of a livelihood might be a reality. The public might in fact be deprived of a useful member. The ten

4-Rousillon v. Rousillon, 14 Ch. D. 351 (1880); Badische v. Schott, L. R. [1892] 3 Ch. 447; Morse Twist Drill & Machine Co. v. Morse, 103 Mass. 73 (1869); Herreshoff v. Boutineau, 17 R. I. 3 (1890).

5-Hitchcock v. Coker, 6 A. & E. 438 (1837) [12].

6-Mitchel v. Reynolds, 1 P. Wms. 181 (1711) [4] ("Particular restrains are either, first, without consideration, all which are void by what sort of contract soever created. 2 H. 5; 5 Moor 115, 242; 2 Leon

210; Cro. Eliz. 872; Noy, 98; Owen, 143; 2 Keb. 377; March, 191; Show. 2 (not well reported); 2 Saund. 155.

"Or secondly, particular restraints are with consideration.

"Where a contract for restraint of trade appears to be made upon a good and adequate consideration, so as to make it a proper and useful contract, it is good."')

7-Hitchcock v. Coker, 6 A. & E. 438 (1837) [26] and see cases cited post 7 note 12.

dency toward monopoly might become decisive. The hiring in such a business is not really for the purpose of training men to go out and conduct a similar business, but rather with the object of keeping them permanently. A restriction, then, upon their going into any other similar business could hardly be regarded as a part of the price for teaching them. Rather must it be looked upon as a method of hampering the employer's competitors. Hence, such wholesale restrictions would point to a monopoly purpose, both in regard to the business and with respect to securing the use of the labor of certain individuals.

SECTION 3

RESTRICTIVE CONTRACTS ACCOMPANYING THE SALE OF A BUSINESS, WHICH SALE, HOWEVER, IS NOT MADE TO A COMPETITOR

§ 6. (1) If the restriction is not broader than the business sold and is operative over a territory less than that of any state where the restriction applies, it is valid.8 The restriction is an essential part of any complete sale of the business. The social interest in the freedom of individuals to sell at the best price obtainable balances any social interest in the freedom of individuals to enter what business they please.

8-Bowser V. Bliss, 7 Black. (Ind.) 344 (1845); National Enameling & Stamping Co. v. Haberman, 120 Fed. 415 (1903); Holbrook v. Waters, 9 How. Pr. (N. Y.) 335 (1854); Weller v. Hersee, 10 Hun. (N. Y.) 431 (1877); Hursen v. Gavin, 162 Ill. 377 (1896); Duffy v. Shockey, 11 Ind. 70 (1858); Whitney v. Slayton, 40 Me. 224 (1855); Doty v. Martin, 32 Mich. 462 (1875); Dunlop v. Gregory, 10 N. Y. 241 (1851); Smith's Appeal, 113 Pa. St. 579, 590 (1886); Harkinson's Appeal, 78 Pa. St. 196 (1875); Oregon Steam Navigation Co. v. Winsor, 87 U. S. 64 (20 Wall.) (1873).

9-Diamond Match Co. v. Roeber,

160 N. Y. 473 (1887) [60] (“It is clear that public policy and the interests of society favor the utmost freedom of contract, within the law, and require that business transactions should not be trammeled by unnecessary restrictions''); Leslie v. Lorillard, 110 N. Y. 519 (1888) [69] ("The object of government, as interpreted by the judges, was not to interfere with the free right of man to dispose of his property or of his labor.''); Wood v. Whitehead Bros. Co., 165 N. Y. 545 (1901) [76] ("In the present practically unlimited field of human enterprise there is no good reason for restricting the freedom to contract, or for fearing in

87. Formerly it was urged against the restriction that the seller might become a charge upon the community because he could not carry on his trade or business. 10 This was at once met