Section 27 - Agreement in restraint of trade void : Indian Contract Act 1872

Is Agreement in restraint of trade void? Section 27 of Indian Contract Act 1872


 

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.