6.4 Agreements in Restraint of Trade and its Exceptions

The rule: agreements unduly restraining any party's freedom to exercise a lawful profession, trade or business are void (the common-law's Nordenfelt reasoning: restraint valid only so far as reasonable — the protection of a legitimate interest, no more than adequate, and not against the public). The Nepali position: the restraint-of-trade bar in the void-agreement provisions, with the reasonableness test's modern acceptance. The recognized exceptions (the restraints upheld): Sale of goodwill — the seller's reasonable restraint within defined limits-and-time (protecting what was sold); Employment/partnership covenants — the employee's-or-partner's reasonable non- compete protecting the employer's-or-firm's trade secrets-and-connection (the confidentiality covenants); Associations-and-associations' rules — the trade associations' membership restraints within reason; The statutory licenses of restraint (the exclusive-dealing approvals; the competition law's interface — the competition statute's abuse-of-dominance frame as the modern control).