restraint of trade


Definitions (2)

1.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.
2.Illegal contract that in any way colludes to damage another's opportunity or ability to carry out a business.

Use restraint of trade in a sentence

  • The restraint of trade was enforced years later as the expert ended up working at a company in the same industry.

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  • It is common for an employee to be compelled to sign a restraint of trade agreement as a condition of employment to keep trade secrets from being leaked to competitors

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  • We had a restraint of trade between us, which was a contract, so there were rules about how we conducted business.

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