Can restrictive provisions in contracts be enforced in Alabama state courts?
Yes. Alabama, Georgia and many other Southern states have provisions in their state constitutions that prohibit restraint of trade, such as business agreements to fix prices, stifle competition or monopolize the production or sale of any commodity. Alabama law contains a criminal penalty for offenders and allows anyone injured by an unlawful combination or monopoly to file a civil law suit. However, most dealer agreements and exclusive supplier contracts are allowed if the terms are reasonable. An agreement between the buyer and seller of a business that the seller will not compete with the business after the sale is also enforceable if it is reasonably limited in time, subject matter and location. Finally, reasonable restrictions in contracts and leases on the use of real property are allowed in Alabama.
