Section 27 - Agreement in restraint of trade void : Indian Contract Act
Is Agreement in restraint of trade void? Section 27 of Indian Contract Act
Section 27 of Indian Contract Act 1872 : "Agreement in
restraint of trade void"
27. Every agreement by which anyone is restrained
from exercising a lawful profession, trade or
business of any kind, is to that extent void.
Saving of agreement not to carry on business of which
goodwill is sold.-Exception 1.-One who sells the goodwill of a
business may agree with the buyer to refrain from carrying on a
similar business, within specified local limits, so long as the
buyer, or any person deriving title to the goodwill from him,
carries on a like business therein, provided that such limits
appear to the Court reasonable, regard being had to the nature
of the business.