ICA Section 27: Agreement in restraint of trade void
Indian Contract Act, 1872 · Chapter 2: Contracts, Voidable Contracts and Void Agreements
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27. Agreement in restraint of trade void . Every agreement by which any one is restrained from exercising a lawful profession, trade or business of any kind, is to that extent void. Saving of agreement not to carry on business of which good-will is sold.
Exception 1.-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.
Official reference: India Code, Legislative Department — checked: 29 September 2026.
This text is for reference, not legal advice. Consult the official source for the authoritative text.
Other sections in this chapter
- 10. What agreements are contracts
- 11. Who are competent to contract
- 12. What is a sound mind for the purposes of contracting
- 13. "Consent" defined
- 14. "Free consent" defined
- 15. "Coercion" defined
- 16. "Undue influence" defined
- 17. "Fraud" defined
- 18. "Misrepresentation" defined
- 19. Voidability of agreements without free consent
- 19A. Power to set aside contract induced by undue influence
- 20. Agreement void where both parties are under mistake as to matter of fact
- 21. Effect of mistakes as to law
- 22. Contract caused by mistake of one party as to matter of fact
- 23. What considerations and objects are lawful and what not
- 24. Agreement void, if considerations and objects unlawful in part
- 25. Agreement without consideration void, unless it is in writing and registered, or is a promise to compensate for something done, or is a promise to pay a debt barred by limitation law
- 26. Agreement in restraint of marriage void
- 28. Agreements in restraint of legal proceedings void
- 29. Agreements void for uncertainty
- 30. Agreements by way of wager void