Indian Contract Act, 1872
Indian Contract Act, 1872
II · Section 27

Agreement in restraint of trade, void.

Synced on 13 Aug 2026Text as per India Code

Every agreement by which any one is restrained from

exercising a lawful profession, trade or business of any kind, is to that extent void.

Exception 1.—Saving of agreement not to carry on business of which good-will is sold.—One

who sells the good-will of a business may agree with the buyer to refrain from carrying on a similar

business, within specified local limits, so long as the buyer, or any person deriving title to the good-will

from him, carries on a like business therein, provided that such limits appear to the Court reasonable,

regard being had to the nature of the business.

* * * * *.

Judgments on Section 27