Are restraints of trade enforceable?
Little infuriates an employer than to have an employee resign and then start up a competing business close by. Is it possible, in law, to prevent an employee from doing so by requiring the employee, at the commencement of employment, to sign a restraint of trade agreement in which he agrees that, if he leaves your employ, he will not start up a competing business? In terms of the Greendale Hardware & Electrical (Pvt) Ltd v Bangaba [2008] JOL 21460 (ZS), a restraint of trade is an obligation voluntarily undertaken by an employee to refrain from the exercise of freedom of trade in favour of the employer in the exercise of freedom of contract. Our law recognises two principles which pull in opposite directions. The first principle is that, as a basic premise, contracts are legally binding and enforceable. Thus, if Parties enter into an agreement, intending it to be legally binding, then – unless there is some legal reason for not doing so – the law will enforce it. However, as per the Adv
