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 void for all purposes

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

Justification based on the interests of the parties and the public

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

Reasonableness in terms of party interests and public interest

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

Ensuring adequate protection for one party without harming public interests Signup and view all the answers

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

Providing adequate protection to one party and being non-injurious to the public Signup and view all the answers

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

Because they were deemed impolitic to enforce 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...

does not fall under one of the exceptions in section 28 of the Contracts Act 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?

Restrictions whereby a party undertakes to provide exclusive service to the other party 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?

Covenant binding a trader in the way of his trade Signup and view all the answers

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

Section 29 Signup and view all the answers

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

Reference to arbitration Signup and view all the answers

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

They violate public policy 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?

The nature of the business Signup and view all the answers

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

Exclusive service covenants during the currency of a contract Signup and view all the answers

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

No Signup and view all the answers

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

In sale of goodwill of business and partnership scenarios Signup and view all the answers

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

'Post-contractual restraint' applies after the contract ends, while 'exclusive service covenants' apply during the contract. Signup and view all the answers

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