Contract in Partial Restraint of Trade Law and Legal Definition

Contract in partial restraint of trade refers to an agreement for qualified restraint of trade. Under modern conveniences and changed business methods and conditions the common-law doctrine relating to transactions in restraint of trade has been modified and its meaning enlarged, the courts having soon recognized the distinction between contracts in general restraint and those in partial restraint of trade, sustaining the latter if they are not unreasonable. [Morehead City Sea Food Co. v. Way, 169 N.C. 679 (N.C. 1915)].

A contract in partial restraint of trade will be sustained when it is confined in its operation to affording a fair protection to the interests of the party in whose favor it is made. It is then held to be reasonable and not in conflict with the interests of the public. [Pittsburg Stove & Range Co. v. Pennsylvania Stove Co., 208 Pa. 37 (Pa. 1904)].