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Section 27 Contract Act — Agreement in restraint of trade, void

The Indian Contract Act, 1872 · Official PDF page 18

Open in NyayaOfficial PDF, page 18

27. Agreement in restraint of trade, void.—Every agreement by which any one is restrained from exercising a lawful profession, trade or business of any kind, is to that extent void.

Exception 1.—Saving of agreement not to carry on business of which good -will is sold .—One who sells the good -will 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 good -will 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. 1* * * * *.

Text extracted from the official PDF (India Code source copy; consolidation date not certified). Line breaks and footnote marks may differ; the PDF is the authority.

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