Agreements In Restraint Of Trade India

April 7th, 2021| Posted by admin
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In modern times, the concept of practising the profession, profession or professional activity has developed widely in relation to perception in recent years. The law also opposed, in public order, any infringement of the freedom of individuals to enter into contracts and the restriction of their freedoms. When the principle of trade restriction was introduced into the Indian Contracts Act in 1872, most people were employed either in manufacturing or in the sale of goods and other goods. But given the emergence of various technological advances, coupled with the enormous impact of globalization in our economy, where companies invest millions of dollars in research and development, information technology, patents, etc., shouldn`t it be reasonable to impose certain restrictions on workers when they practice their profession, profession or business, when they damage the employer`s business or relationship with its customers, or when it comes to using confidential information or secrets to their advantage? Employees are happy to sign confidentiality or confidentiality agreements at the time of entry into the labour market, but they do not mean anything if it cannot be imposed after the end of an employee`s term with the company, especially considering that he may have been familiar with certain confidential or sensitive information during his term of office. This article therefore underlines the need to make a change and avoid the theory of absolute restraint mentioned in Section 27 of the Contracts Act and to highlight a common basis for protecting the rights of both employers and workers. With regard to employer-employee contracts, the judiciary is stricter than in other contracts, such as partnership contracts, cooperation contracts, franchise agreements, agency/distribution contracts, commercial contracts. Negative provisions during the period of employment are considered valid and are not subject to trade restrictions. However, the court refused to impose a non-competition clause after the termination of employment contracts as a “commercial restriction”, which is prohibited by Section 27 of the Act.

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