The Frontiers of Restraint of Trade Litigation Protecting Goodwill: Policy, Principles and Practice

Michael Tamvakologos

Australian Business Law Review

Michael Tamvakologos, ‘The Frontiers of Restraint of Trade Litigation Protecting Goodwill: Policy, Principles and Practice’ (2020) 48(4) Australian Business Law Review 332

Abstract

A litigant seeking to enforce a goodwill restraint will encounter a raft of potential obstacles and issues. This article explores the history and evolution of goodwill restraints and their current treatment by Australian courts, including the likely reasons for the increased enforceability prospects of a goodwill restraint. It examines the six main lines of defence to an application to enforce a restraint. Particular attention is given to the defence regarding largely fact-driven issues concerning whether the restraint exceeds the bounds of reasonableness and cannot be saved by application of the common law doctrine of severance, or powers exercisable under the Restraints of Trade Act 1976 (NSW). Further, given the nuances and discretion involved, restraint litigation provides fertile ground for tactical considerations to significantly influence the allocation of litigation risk between the parties, the outcome achieved and the remedy awarded. Some primary tactical decisions are addressed.