restraint of trade
A contractual term that limits a person’s right to exercise his trade or carry on his business. An example is a term in a contract of employment or partnership agreement prohibiting a party from engaging in a similar business for a specified period after the relationship ends. Such a term is void unless the party relying on it shows that it does not offend public policy; it must also be reasonable as between the parties and justified in relation to the particular area of business. See also garden leave clause. |