Covenants in Restraint of Competitive Practice

Partnership or other agreements containing covenants restrictive of competitive practice may need different drafting in the light of a recent decision of the Court of Appeal. Dr. D. J. L. Routh and Dr. T. D. G. Wilson practising at an address in Okehampton engaged Dr. C. G. Jones to assist them under an agreement which contained the following covenant. Dr. Jones undertook that within a radius of 10 miles from that address and within a period of five years from the end of the engagement he would not practise or assist any other person to practise any form of medicine, surgery or midwifery nor would he accept any professional appointment within those limits. The plaintiffs claimed that the agreement came to an end in February 1946, that the restrictive clause then came into effect and that an injunction should be granted to restrain Dr. Jones from practising within the 10-mile radius in contravention of the covenant. These covenants ' in restraint of trade' are legally enforceable only if they are reasonable and not too vague. The classic statement of the law was uttered by Lord Macnaghten in Nordenfelt v. Maxim Nordenfelt Co. in 1894. ' The public have an interest in everyone's carrying