Facts of the case :--

          Nordenfelt, the defendant in the instant case was a Swedish National. He sold his business of quick firing guns to the plaintiff Company for £2,87,500 against the following two conditions (restraints/covenants) :

1. That for 25 years, he would not engage in the similar business (i.e. Manufacturing of quick firing Guns) except on behalf of the company. (In simple, not to carry on similar business except on behalf of the company for a period of 25 years) and

2. That he would not engage in any business, whatever likely to complete in any way with the business carried on by the company (not to engage any business, which may complete in any way with the plaintiff Company)

Issue involved

The issue involved in the instant case were :

1. Whether the defendant was bound by the above two restraints (conditions/covenants)?

2. Whether the restraints were were void?

       With regard to the first question, the defendant was to be bound by by the first condition/covenant, since the defendant had sold the very business of the manufacturing guns for a large sum of money. However, the defendant was not bound by the second condition, which prevented him from engaging in any other competing business.
       With regard to the second question, if a covenant imposes general restraint on trade, which extends to the territory as a whole, it is void. Hence, the second covenant in the instant case is void. However, a general restraint, is not void at all times, but may be valid provided; it is found to be reasonable Both to the parties and the general public. Therefore, the first restraint is reasonable to both the parties because the plaintiff Company purchased business for a huge sum and the defendant sold away the business. It (1st condition) is also reasonable from the point of view of the general public, since an English Company was deriving (getting) benefit of the invention of a foreigner, a Swedish National. Therefore the first covenant is valid (not void). 


           The Court considered the first condition (covenant) as reasonable, since the defendant had sold the business for a huge amount and granted the injunction. But, the second condition, which prevents the defendant from engaging in any other competing business, was regarded unreasonable (as the restraint/condition would not protect the proprietary interest of the plaintiff Company).


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