Understanding Restraint of Trade Clauses

Expert Insights from Gold Coast Law Firms' HTW Legal on Restraint of Trade Clauses

Restraint of Trade clauses are commonly found in employment contracts and business sale agreements. They limit individuals—employees or business sellers—from certain professional activities post-termination or sale. However, grasping these clauses and their implications is vital. Seeking advice from seasoned legal experts, like those at Gold Coast law firms such as HTW Legal, can be invaluable for both parties involved.

Understanding Restraint of Trade Clauses

Restraint of Trade clauses may appear simple at first glance, but their interpretation and enforcement are intricate. These clauses are initially seen as void unless the party enforcing them can prove their reasonableness. To do so, they must show that the restraint is necessary to protect legitimate business interests without going beyond what’s necessary.

Key Factors Considered by the Courts

Courts evaluate various factors to determine reasonableness, including the duration, geographic scope, activities restrained, negotiation process, individual’s role, compensation offered, and impact on earning potential.

Common Restrictions and Drafting Techniques

These clauses typically prohibit soliciting clients or employees and safeguarding confidential information. They’re often drafted with alternatives of varying scopes to enhance enforceability.

Remedies for Breach

In case of breach, the aggrieved party may seek legal remedies, typically through the Supreme Court, such as injunctions, damages, and costs.

Seeking Legal Guidance

Given the complexity and legal implications, seeking advice from legal experts like HTW Legal is crucial when dealing with or drafting contracts containing such clauses. Their tailored guidance ensures contracts have enforceable and fair provisions, protecting all parties involved.


Understanding and navigating Restraint of Trade clauses demands careful consideration and expert guidance. Partnering with experienced legal professionals ensures confidence in contractual agreements, safeguarding rights and interests.


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The posts in this blog are published as general information only. They are not intended to nor do they constitute legal advice. HTW Legal Group strives at all times to provide users with accurate information but we do not guarantee that the information contained in this blog reflects accurately current law or procedure.

You should not act or refrain from acting in any matter based upon the information contained in this blog without first seeking the advice of a lawyer who practices in the area of law related to your matter. Do not hesitate to contact HTW Legal Group to make an appointment with one of our team of experienced lawyers to obtain advice tailored to your personal situation.