restraint of trade definition

restraint of trade

Legal contract between a buyer and a seller of a business, or between an employer and employee, that prevents the seller or employee from engaging in a similar business within a specified geographical area and within a specified period. It intends to protect trade secrets or proprietary information but is enforceable only if it is reasonable with reference to the party against whom it is made, and is not contrary to the public policy.

Illegal contract that in any way colludes to damage another's opportunity or ability to carry out a business.

This content can be found on the following page:

http://www.businessdictionary.com/definition/restraint-of-trade.html