Nordenfelt v Maxim Nordenfelt Guns and Ammunition CoLtd [1894] AC 535
Citation:Nordenfelt v Maxim Nordenfelt Guns and Ammunition CoLtd [1894] AC 535
Rule of thumb:Are worldwide restraints of trade clauses? Valid, they can be if it is a worldwide marketplace – this is not automatically excessive.
Background facts:
The facts were that Nordenfeldt sold his arms manufacturing business. He agreed a clause in this sale not to compete anywhere in the world in this sector anywhere in the world for 25 years.
Parties argued:
Nordenfedlt argued that this was excessive and a full worldwide ban on trading anywhere on the planet had to be excessive.
Judgment:
The Court held that due to the nature of this business and the sum he was paid for his own business, this was not a violation of his right to trade. The Court in this case held that if a person is operating in a worldwide market then even some extremely restrictive trade clauses can still be deemed to be reasonable.
Ratio-decidendi:
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