Case summary & court held

1. Nordenfelt v Nordenfelt Machine Gun <br />Facts:<br />Thorsten Nordenfelt had established a valuable business in the manufacture of machine guns, operating in Sweden and England. His customers included most national governments across the world. He sold the business to a company, which then transferred it to Maxim Nordenfelt. At that time Thorsten Nordenfelt entered into an agreement with Maxim that he (Thorsten) would not for a term of 25 years engage in the manufacture of guns, explosives, etc, other than on behalf of the company. Thorsten broke this covenant, alleging that it was unenforceable as being in restraint of trade.<br />TCH:<br />The provision prohibiting Nordenfelt from making guns or ammunition was reasonable.<br />The providing banning competition ‘in any way’ was unenforceable as an unreasonable restraint of trade.<br />The court enforced the amended agreement that Nordenfelt “for the next 25 years, would not make guns or ammunition anywhere in the world, and would not compete with Maxim in any way.”<br />Vancouver Malt v Breweries<br />Facts:<br />A & Co were brewers of sake; they sold their business to B & Co and promised, for a period, not to brew beer. Since the only goodwill A & Co had acquired was in respect of what they had actually /;brewed (namely sake) the covenant was unnecessarily wide.<br />TCH:<br />A & C were free to brew beer other than sake.<br />Goldsoll v Goldman – Same type of Business<br />Facts:<br />The sale of a jewellery business with a covenant not to compete over a broad area of Europe and the United States for two years. The purchaser sought an injunction for breaches of the covenant. <br />TCH:<br />Sever countries outside of the United Kingdom form the covenant, but it also went further and reduced the range of restricted activity.<br />Papastravou v Gavan<br />Facts:<br />Purchase hairdressing salon.<br />Restraint: area – radius of three miles<br />Vendor business 350 yards away<br />TCH:<br />Restraint was unenforceable – too wide.<br />Drake Personnel Ltd v Beddison<br />Facts: - Trade Secret<br />TCH:<br />It would determine the nature of the information in question by looking to the actual information itself, not the label used, to determine if at law it had protection. In the case, the use of the label “trade secret” was incorrect at law and the information was not protected.<br />The area of restraint of trade clause was too wide.<br />Attwood v Lamont<br />A court considering whether a restrictive covenant in an employment contract is reasonable, can sever words which render it too broad ‘if the severed parts are independent from one another and can be severed without the severance affecting the meaning of the part remaining’ and/or where the covenant is not really a single covenant but is in effect a combination of several distinct covenants.<br />Facts:<br />Defendant was employed as a tailoring cutter for the plaintiff, a general outfitter. The defendant covenanted not to subsequently engage in a number of trades carried on by the plaintiff’s business, including tailor, milliner, draper, hatter and haberdasher within a ten mile radius. <br />TCH:<br />Void as in restraint of trade.<br />Fitch v Dewes<br />Facts:<br />An assistant solicitor had already worked for his employer in humbler status for many years when, aged 17, he signed a covenant restricting his acting in competition with his employer within seven miles of Tamworth Town Hall for an unlimited time. He complained of the temporal restriction.<br />TCH:<br />The clause did not exceed what was reasonably necessary to protect the plaintiff’s business. The justification was that the business was one to which clients were likely to return over a long period.<br />Wyatt v Krelinger<br />Facts:<br />An employee (a wool worker) was promised a pension on his retirement and it was agreed that he would not receive the pension if he competed against his employers in the wool trade. <br />TCH:<br />The transaction is void. It was contrary to the public interest to deprive the community of a valuable skill.<br />