One of the most dangerous classes of illegal contracts is that of those in restraint of trade. The welfare of the community requires free competition in all branches of industry, and it is also against public policy to allow a person to be prohibited from engaging in that occupation with which he is most familiar.

Not all contracts in restraint of trade, however, are illegal. An absolute agreement without any limitations not to carry on a certain occupation is void;20 but contracts in restraint of trade, where the restraint is limited, both as to time and place, may be valid if such limitations are reasonable. The test of the validity of the contract is always the reasonableness of the limitation.

8 See Section 45. 9 See Section 46. 10 See Section 47. 11 See Section 48.

See Section 49.

See Section 50.

14 See Section 51.

15 See Section 52.

16 See Section 53.

17 See Section 54.

18 See Section 55.

19 See Section 56.

20 Ross vs. Sadybeer, 21 Wend., 166; Mitchell vs. Reynolds, 19 Wms., 181; Dean vs. Emerson, 102 Mass., 480.

The decisions as to what constitutes a reasonable restraint have been collected and summed up in two leading cases, one English and one American, extracts from which are here given. Rousillon vs. Rousillon21: "Now, what is the criterion by which the reasonableness of the contract is to be judged? I will take the law on that point from the language of Chief Justice Tindal, in delivering the judgment of the Court of Exchequer Chamber, on appeal from the Court of Queen's Bench, in Hitchcock vs. Coker, 6 A. & E., 438. He said (6 A. & E., 454): 'We agree to the general principle adopted by the Court, that, where the restraint of a party from carrying on a trade is larger and wider than the protection of the party with whom the contract is made can possibly require, such restraint must be considered as unreasonable in law, and the contract which would enforce it must be therefore void.' That passage was adopted by Lord Wenseleydale, when a baron of the Court of Exchequer, in delivering judgment in Ward vs. Byrne, 5 M. & W., 548, 561, and therefore the rule so expressed has the authority of the Courts of Queen's Bench, Exchequer, and Exchequer Chamber. If, therefore, the extent of the restraint is not greater than can possibly be required for the protection of the plaintiff, it is not unreasonable.

"Another case which in my view throws great light upon this question is Tallis vs. Talks, 13 & B.

21 14 Ghan. Div., 351.

391. There the plaintiff and the defendant had been partners as publishers of books. Part of their trade, called the canvassing trade, consisted in publishing books in numbers, and employing travellers to sell such books by canvassing for purchasers. The partnership was dissolved, the plaintiff being the continuing partner. The defendant agreed, amongst other things, not directly or indirectly to be concerned in the canvassing trade in London or within 150 miles of the General Post Office, nor in Dublin or Edinburgh, or within fifty miles of either, nor in any town in Great Britain or Ireland in which the plaintiff or his successors might at the time have an establishment, or might have had one within the six months preceding. The action was for a breach of the covenant. It was pleaded, amongst other things, that there were numerous works which the plaintiff did not publish, and had no intention of publishing, and that many of such works might be published by the defendant with advantage to the public and without injury to the plaintiff; that the canvassing trade applied to all such books; and that the restraint, as to the canvassing trade as applicable to such books, was unreasonable. And in giving judgment they considered a dictum in Mitchel vs. Reynolds, 1 P. Wms., 181-191, to the effect 'that wherever such contract stat indifferenter, and for aught appears may be either good or bad, the law presumes it prima facie to be bad.' But, instead of adopting that view, they called attention to what was said by the Court of Exchequer in Mallan vs. May, 11 M. & W., 653, 667: That it would be better to lay down such a limit, as, under any circumstances, would be sufficient protection to the interest of the contracting party, and if the limit stipulated for does not exceed that to pronounce the contract to be valid.' And further on in their judgment they said this: 'Even if the facts therein (in the pleas) stated are taken to be admitted by the demurrer, and that the reasonableness of the restriction in question is to be considered with reference to those facts together with the facts alleged in the declaration, still we think the pleas bad. For, although the books capable of republication may be almost infinite, still the number of subscribers to such republications coming out in numbers is limited; and, although, if the defendant's books are excluded, it does not follow that the plaintiff's books would be purchased, still we cannot ascertain that the number of subscribers to the plaintiff's books would not be diminished if the defendant competed with him by offering other books, especially if they were of a similar character. And, unless the defendant made it plainly and obviously clear that the plaintiff's interest did not require the defendant's exclusion, or that the public interest would be sacrificed if the defendant's intended publications are excluded, according to the general rule before referred to we ought not to hold the contract void.' In other words, the Court of Queen's Bench threw upon the defendant, who alleged the invalidity of the contract on this, the burden of showing that it was plainly and obviously clear that the protection extended, by the proposed exclusion of the defendant's publications beyond what the plaintiff's interest required. And such, in my opinion, ought to be the rule of law upon this point, because the defendant is seeking to put a restraint upon the freedom of contract, and he who does that must, I think, show that it is plainly necessary for the purposes of freedom of trade. I adopt the views expressed by the Master of the Rolls in Printing and Numerical, etc., Company vs. Sampson, Law Rep., 19 Eq., 462, as to the necessity of courts being careful how they invade the freedom of contract.' * * *