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The Validity Of Restraint Of Trade Agreements

It is not enough to simply label confidential information as such. To be confidential, the information must be economically useful, i.e. limited in commerce or industry, have economic value for the person it wishes to protect, and know only a limited number of people. It is the prerogative of a professional in a free country, in any matter that does not violate the law, to regulate his own mode of continuation at his discretion and at his own choice. If the law has regulated or limited the way it does so, the law must be followed. But no power other than the general law should restrict his freedom of assessment. In the past, the restriction of trade agreements was annigable and unenforceable, unless the employer could demonstrate that it was a reasonable agreement between the parties. Fortunately for employers, the position in our law has changed. There is a widespread misunderstanding among many members of the public and even the bar that agreements to restrict trade are invalid and unenforceable. Indeed, and in the law, nothing could be further from the truth.

The courts have ruled that it is inappropriate to limit trade agreements in cases where they are too vague or too broad. In Hi-Tech Recruitment (Pty) Limited and Others v. Nel and Another, the Tribunal stated that “the restriction is inappropriate where the duration and extent of the area to be applied is outside the agreement itself and/or the restriction is broader than necessary”. A trade restriction clause aims to protect the employer`s proprietary interests – including its trade secrets, confidential information and customer information – which give a company its competitive advantage and protect the company`s information from ending up in the hands of its competitor. Trade restrictions are a common law doctrine that refers to the applicability of contractual restrictions to the freedom to do business. It is a precursor of modern competition law. In an old case leader of Mitchel against Reynolds (1711) Lord Smith says LC:[1] There are cases where the limitation of trade agreements is not applicable. . .


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