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What is a Restraint of Trade clause?

Wednesday 20 March, 2019

It is a clause in your contract with your boss to protect their businesses’ confidential and sensitive information when you have finished working for them. It stops former employees setting up a business in competition

Most of the time these clauses are limited to a specific period of time (e.g. 4 months) and geographical area (e.g. within 5km of your previous work premises).

Why do I have a restraint of trade clause in my contract?

So that when you finish working, for the period of time specified in your contract and within that area, you cannot do things like take former clients with you or work in the same industry in direct competition of your former boss, perhaps by setting up your own business.

It is important to know that just because you have a restraint of clause in your contract, it may not be enforceable if it is considered to be unreasonable.

There are lots of different things to consider when deciding whether or not a restraint of trade clause is reasonable and enforceable.

If you have one of these clauses in your contract that you are concerned about or want some clarification on, get in touch for some free advice.