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Restraints of Trade

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Restraints of trade enforcement requires the balancing of two conflicting principles.

  • the sanctity of contract and
  • the freedom to trade

In an effort to strike a balance between these two opposing principles SA Courts have pronounced that the onus in on the party resisting enforcement of a restraint to prove that it offends against public policy ( Magna Alloys and Research ( SA ) Pty  Ltd v Ellis 1984 ( 4) SA 874 (A))


There are opinions that states that the principle in SA law that the person restrained bares the onus of proving that a restraint is against public policy and should not be enforced must be reviewed in light of ss 22 and 36(1) of the Constitution.


The opinion states that the onus must therefore be on the party seeking to enforce a restraint to prove that it is reasonable and justifiable in public interest.
Only once the restrainer (covenantee) has discharged the overall onus of proving that the restraint complies with s 36(1) of the Consitutions (is reasonable and justifiable) must the onus fall on the restrained (covenantor)  to prove that the restraint opposes public policy (unreasonable)


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