Many contracts between companies that restrict trade are contrary to the Competition Act 1998 or at EU level, unless the competition authorities have authorised exemptions from anti-competitive rules. Competition law is too complex to be summarized here, but it is important to know that, in practice, certain trade policy agreements may raise competition and common law issues. The Supreme Court`s decision of the Standard Oil Company of New Jersey against the United States in 1911 was based on an analysis of Taft`s reason rule. In that case, the Court found that a contract contravened the Sherman Act only if the treaty “unduly” limited trade, i.e. where the treaty had monopolistic consequences. According to the Court, a broader meaning would prohibit normal and usual contracts, thus violating contractual freedom. Accordingly, the Court approved the motivational rule set out in Addyston Pipe, which in turn stems from Mitchel v. Reynolds and the common law of trade restrictions. Trade restriction agreements are contrary to public policy and are of prima facie nulliation, unless they can be considered appropriate between the parties and in the public interest. D sold a jewellery store to the applicant and stated that it would not act on genuine jewellery or imitation in the United Kingdom or other specific foreign locations.
In the present circumstances, the reluctance towards the latter was too great, as was the reference to real jewellery, given that in the United Kingdom the company made only imitations. The unborn restrictions were separated by, so that a valid contract for trade restrictions. Restrictions on a business seller to restrict competition are more easily maintained than restrictions on workers, but they are generally subject to the same principles. “Trade restriction agreements should be interpreted, like others, by reference to the intended purpose. In cases such as the one before us, the protection of one of the parties from commercial competition is an object. Such agreements cannot be properly considered in cases that fall within the terms of the agreement, but which cannot reasonably be exempted from the fact that they have never been contemplated by the parties and which, from a rational point of view of the agreement, are excluded from its application by actually falling outside and not within their actual scope. Greig v Insole  1 WLR 302 A case that resulted from the cricket packer affair, when Packer established a rival group of teams to play international cricket and put players in the mix.