Common Law and Restraint of Trade Contracts Quiz
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Questions and Answers

According to common law, how were contracts involving restraint of trade initially treated?

  • As contracts enforceable without justification
  • As contracts of imperfect obligation
  • As contracts benefiting the public policy
  • As contracts void for all purposes (correct)

What is required for a restraint of trade to be enforceable under common law?

  • Complete absence of justification
  • Justification based on public interest only
  • Justification solely for the party imposing the restraint
  • Justification based on the interests of the parties and the public (correct)

In the Nordenfelt v Maxim Nordenfelt case, what was stated as the only sufficient justification for a restraint of trade?

  • Adequate protection for the party imposing the restraint
  • Reasonableness in terms of party interests and public interest (correct)
  • Injurious nature towards the public
  • Reasonableness with regards to public opinion

What does common law require when considering if a restraint of trade is justifiable?

<p>Ensuring adequate protection for one party without harming public interests (D)</p> Signup and view all the answers

What criteria must a restraint of trade meet to be considered reasonable under common law?

<p>Providing adequate protection to one party and being non-injurious to the public (A)</p> Signup and view all the answers

Why were contracts involving restraint of trade initially considered against public policy according to common law?

<p>Because they were deemed impolitic to enforce (D)</p> Signup and view all the answers

In Malaysia, an agreement restraining an advocate and solicitor from practicing within a specified limit after the termination of his service agreement is void because it...

<p>does not fall under one of the exceptions in section 28 of the Contracts Act (D)</p> Signup and view all the answers

According to Polygram Records Sdn Bhd v The Search, which type of restrictions imposed during the currency of a contract are considered valid?

<p>Restrictions whereby a party undertakes to provide exclusive service to the other party (D)</p> Signup and view all the answers

What type of covenant is considered a restraint upon the manner of trading according to Hua Khiow Steamship Co Ltd v Chop Guan Hin?

<p>Covenant binding a trader in the way of his trade (A)</p> Signup and view all the answers

Under which section of the law are agreements in restraint of legal proceedings considered void?

<p>Section 29 (B)</p> Signup and view all the answers

What is allowed under the Scott v Avery clause in relation to legal agreements?

<p>Reference to arbitration (D)</p> Signup and view all the answers

According to Section 27, why are agreements in restraint of marriage considered void?

<p>They violate public policy (A)</p> Signup and view all the answers

What is the key issue when considering the reasonableness of a restraint in relation to the sale of goodwill of a business?

<p>The nature of the business (B)</p> Signup and view all the answers

In the context of restraint of trade, which situation involves 'post-contractual restraint'?

<p>Exclusive service covenants during the currency of a contract (C)</p> Signup and view all the answers

According to the information provided, are common law criteria considered when evaluating the reasonableness of a restraint?

<p>No (D)</p> Signup and view all the answers

In which situations do 'local limits' need to be reasonable according to the text?

<p>In sale of goodwill of business and partnership scenarios (A)</p> Signup and view all the answers

What differentiates between 'post-contractual restraint' and 'exclusive service covenants' in terms of being a restraint of trade?

<p>'Post-contractual restraint' applies after the contract ends, while 'exclusive service covenants' apply during the contract. (B)</p> Signup and view all the answers

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