Mutiso owned a bakery in Kangundo Town. He sold it last year to Munyao. He agreed, as part of the sale, not to carry on a bakery business for a period of 3 years within 200 miles radius of the bakery he had sold. He has now decided to open a bakery in Machakos Town and seeks your advice as to whether he can legally do so. What advice would you give him?

• This problem is based on contracts in restraint of trade.
• It is evident that Mutiso covenanted not to set up a similar business within a radius of 200
miles from Munyao‟s business for 3 years.
• The legal issue is whether Mutiso can open a similar business in Machakos town which is less than 100 miles from Kangundo.
• As matters stand, Mutiso is bound by the contract with Munyao and cannot legally open the bakery.
• However because this restraint is too unfair to Mutiso, I will advise him to apply to the High court for the contract to be declared void pursuant to section 2 of the Contracts in Restraint of Trade Act.
• My advise is based on the above statute as the restraint is unreasonable. It confers upon Munyao more protection than is reasonably necessary.

Share through

Leave a Reply

Your email address will not be published. Required fields are marked *