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WCLawyer, Attorney
Category: South Africa Law
Satisfied Customers: 15603
Experience:  L.LB (UOVS)
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18 months ago I sold my business to a friend who owned a much

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18 months ago I sold my business to a friend who owned a much bigger business than mine. 4 months later this friend died of cancer and the business was taken over by his children. My relationship with the new owners deteriated over the past 18 months to a point where after raising a grievance I was suspended, went through a hearing and ultimately had my employment terminated with immediate effect with no financial settlement because of a breakdown in the trust relationship between them an myself.

My employment contract contained a restraint of trade of 5 years.
I am 66 years of age, receiving treatment for cancer. and now find myself out of work with a restraint of trade clause restraining me from working in an industry and with products I have worked with for 45 years.
The restraint can only be to keep me out of competing with them in the industry I am in should I decide to open a business again. There is nothing technical or secretive in what I do and the products involved. These products are available from manufacturers in many countries around the world and are imported by many companies in South Africa.
Please can you advise me what I should do.
Thank you so much.
Kind Regards,
Good day.

Generally a speaking, a contract of restraint of trade will, in the absence of factors like fraud and duress, be enforceable even if its terms are unreasonable or unconscionable. Since it is not the function of the court to remake the contract, it will not relieve one party from any term which he or she finds onerous or unexpectedly harsh. But an agreement in restraint of trade may, on the ground of public policy, be unenforceable.
The onus of proving that a restraint of trade is contrary to the public interest and hence unenforceable rests upon the opponent to the restraint. This burden of proof is not easily discharged. In deciding whether or not a contract in restraint of trade is contrary to the public interest, regard should be had to two considerations: agreements freely concluded should be honored, and everyone should be free to enter the business or professional world. An unreasonable restraint of trade between parties would in general probably also be contrary to the public interest. On the other hand, a restraint which is reasonable between parties might nevertheless, for a reason not peculiar to the parties, be in conflict with the public interest, and possibly also vice versa. Reasonableness is first of all determined with reference to the protectable proprietary interest(s) of the party in whose favour the restraint operates, which interest must have been infringed (actually, or there must at least have been a likelihood of or potential infringement). This interest should then (qualitatively and quantitatively) be weighed up against the interest of the other party (to be economically active and productive). If the latter interest surpasses the former interest, the restraint would as a rule be unreasonable and accordingly unenforceable. An important guideline in the weighing-up process is that the restraint should, as far as activities, area and duration are concerned, be necessary to protect the infringed or threatened interest. Other factors that may also play a part in judging the question of reasonableness, are facets of the public interest which have nothing to do with the relationship between the parties but may nevertheless require that the restraint should (or should not) be maintained, the inequality of bargaining power between the parties, the parties’ own view as to the reasonableness of the restraint, as well as the values underpinning the Constitution. The court will have regard to all the circumstances obtaining at the time when it is asked to enforce the agreement (and not when the agreement was concluded).

The court is not limited to a finding in regard to the contract in restraint of trade as a whole, but may declare the contract partially enforceable or unenforceable. The party seeking partial enforcement must establish a proper basis for such enforcement. In determining whether partial enforcement is justified, the court may take into consideration matters such as whether the restraint was unduly oppressive or designed to terrorize, and whether partial enforcement would not operate too harshly or unfairly towards the party bound by the restraint. An unreasonable restraint will not be partially enforced if it would require major plastic surgery, in the form of a drastic re-casting of its provisions, to make it reasonable. The court is therefore not obliged in all cases to whittle down an unreasonable restraint of trade until it eventually becomes reasonable.

There is no doubt in my mind that the time frame will be found to be too restrictive. That will either make the restraint invalid or the court may reduce it.

If the dismissal is unfair, the restraint will not be upheld, so you absolutely have to challenge the fairness of the dismissal. If you can, get a labour attorney or consultant to assist you.

I hope this answers your question, but if you have any further questions, feel free to ask them before you rate. It will not cost you anything extra. If you are satisfied with the answer, kindly click on one of the five faces on the ratings page. I don't get anything for this answer unless you do.

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