Section 27 Indian Contract Act 1872
Section 27 of the Indian Contract Act 1872 is about Agreement in restraint of trade, void. It is under ‘Void agreements’ of CHAPTER II of the Act. CHAPTER II is titled OF CONTRACTS, VOIDABLE CONTRACTS AND VOID AGREEMENTS.
Every agreement by which any one is restrained from exercising a lawful profession, trade or business of any kind, is to that extent void.
Exception 1. Saving of agreement not to carry on business of which good-will is sold.
One who sells the good-will of a business may agree with the buyer to refrain from carrying on a similar business, within specified local limits, so long as the buyer, or any person deriving title to the good-will from him, carries on a like business therein, provided that such limits appear to the Court reasonable, regard being had to the nature of the business.
See also:
Section 26 Indian Contract Act 1872 (Agreement in restraint of marriage, void)
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