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Key Considerations on the Application & Enforcement of Restrictive Covenants

1.RESTRICTIVE COVENANTS - THE LEGAL STARTING POINT Restrictive covenants are a form of Restraint of Trade, and the default position of the courts in respect of such restraints are that they are unenforceable. Nordenfelt v Maxim Nordenfelt Guns and Ammunition Co Ltd 1894 AC 535: “All interference with individual liberty of action in trading, and all restraints of trade of themselves, if there is nothing more, are contrary to public policy, and therefore void. That is the general rule” As the starting point therefore, clients and lawyers should assume that any restrictive covenant will be deemed unenforceable unless… “But there are exceptions: restraint of trade and interference with individua

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