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provision was that, if any merchant refused to allow the stevedoring of any ship consigned to them to be done by the party entitled to it under the agreement, but should require any other of the parties to the agreement to do it, the party doing the work should give an equivalent to the persons so losing the stevedoring of an amount to be determined by arbitration. The Judicial Committee thought this not unreasonable. “It provides in a fair and reasonable way for each party obtaining the benefit of the stevedoring of the ships to which by the contract he was to be entitled. Each party might in turn derive benefit from this clause, and one of the four firms would always get the profit of the ship stevedored, though the work might be done by another of them. As regards the merchant, also, he can have his ship stevedored by the party whom he may require to do it, at least there is no prohibition against his having it so done.” Another provision in the agreement was, that the parties to it would not “ undertake or be in any way concerned in or interfere in the stevedoring, either in whole or in part, of any ship or vessel consigned to any of the said persons or firms otherwise than according to the provision in that behalf herein before contained.” “The covenant in such cases," said the Court, "restrains three of the four parties to the agreement from exercising their trade, without giving any profit or benefit to compensate for the restriction to either of the four, whilst the combination they have thus entered into is obviously detrimental to the public, by depriving the merchants of the power of employing any of these parties, who are probably the chief stevedores of the port, to load their ships, unless in each case they employ the one of the four to whom the ship, as between themselves, has been allotted, however great and well founded their objection may be to employ him. Such a restriction cannot be justified upon any of the grounds on which partial restraints of trade have been supported. It is entirely beyond anything the legitimate interests of the parties required, and is utterly unprofitable and unnecessary at least for any purpose that can be avowed.”
There must be a consideration for a contract in partial restraint of trade. It was once supposed that the consideration must be “ adequate.” It has, however, long been settled that the Courts will not inquire into the adequacy or sufficiency of the consideration (a). It is enough that it is not merely nominal or colourable.
The restraint may be indefinite in point of time; a man may bind himself not to practise a certain trade in a district for his whole life-time (b). Indeed such agreements are very common in the case of the sales of goodwills of businesses. Yet the element of time is not wholly unimportant. When the question is whether a contract is reasonable or not in point of space, it may be material to know how long the restraint is to be in force (c).
An agreement to restrain A. from exercising his trade is obviously different in substance from an agreement binding A. not to use a secret process discovered or purchased by B.; and Courts of Equity have always prevented persons making use of trade secrets contrary to an agreement (d). Thus A., who sells a patent to B., may be bound by a promise not to divulge the process to any other person.
The question sometimes arises whether a contract of service may be enforced, if the consideration be partly illegal or immoral. Suppose a person is engaged to buy spirits abroad and smuggle them into this country; it would no doubt be held that the two acts were incapable of separation, and that the whole contract was void (e). But if it be possible to separate the legal from the illegal part of the consideration -if there be, in substance, separate considerations for separate contracts-a Court will enforce one part of the contract and reject the other.
(a) Grarely v. Barnard (1874), note (r); Bryson v. Whitehead (1822), L. R. 18 Eq. 518.
1 Sim. & St. 74 ; Best, C. J., in Homer (6) Hitchcock v. Coker (1837), 6 A. v. Ashford (1825), 3 Bing. 322, & E. 438 ; Cattle v. Tourle (1869), L. R. 4 Ch. 654.
(e) Leake on Contracts, 779; R. (c) Proctor v. Sargent (1840), 2 v. Northwingfield (1831), í B. & Ad. M. & G. 20.
(d) Leather Cloth Co. v. Lorsont, see
Cases of Mutuality.
CONSIDERATION. Lees v. Whitcomb (1828), 5 Bing. Pilkington v. Scott (1846), 15 M.& 34, 3C. & P. 289. Defendant signed W. 657. Plaintiffs agreed with L. a written agreement to the fol- that he should serve them for seven lowing effect : “ I agree to remain years ; that he should not during with Mrs. Lees, of 302, Regent that term work for any other person Street, for two years from the date without the license of the plainhereof, for the purpose of learning
that it should be lawful for the business of a dress-maker.” the plaintiffs to deduct from his No binding agreement; there wages any fines, &c. ; and that the being no obligation to teach, and plaintiffs should have the option of no consideration being expressed. dismissing him from their service
Sykes v. Dizon (1839), 9 A. & on giving a month's notice or a E. 693; 1 P. & D. 463. Memo- month's wages. Held that, lookrandum of an agreement in the ing to the provisions of the agreefollowing terms : “I, William ment, there was an undertaking Bradly, of Sheffield, do agree that to employ L. for seven years. I will work for you and with John Hartley v. Cummings (1847), 5 Sykes, of Sheffield, manufacturer C. B. 247; 17 L. J. Č P. 84. of powder-flasks, at such work as Agreement between plaintiff and he shall order and direct, and no A. that A, should serve for seven other person whatsoever from this years at a given rate of wages, and date henceforth during and until not work or serve any other person the expiration of twelve months, without master's consent ; in con
; and so on from twelve months' sideration of which plaintiff agreed end to twelve months'end, until I to pay A. 24s. per week for certain shall give the said John Sykes work'; plaintiff to be at liberty, if twelve months' notice in writing A. were sick, or if A. discontinued that I shall quit his service.” the trade, to retain any other Agreement was a nudum pactum, person in A.'s place, without payand could not be enforced.
ing him wages. The agreement Williamson v. Taylor (1843), not void for want of mutuality, or 5 Q. B. 175. Defendants, owners for being in unreasonable restraint of a colliery, hired plaintiff to hew of trade. coals at certain rates, according to R. v. Welch (1853), 2 E. & B. work done, and plaintiff agreed to 357 ; 22 L. J. M. C. 145. R. Whitcontinue defendant's servant all taker, in consideration of £3 lent the time the pit should be laid off or advanced to him by work, and, when required, to do a tain persons mentioned in the full day's work on every working agreement and of wages to be day. Defendants not obliged to paid by them, agreed to serve employ plaintiff for a reasonable them and no one else, without number of working days during their consent, for twelve months the term.
and during and until the exAspdin v. Austin (1844), 5 Q. piration of three months from B. 671. The plaintiff agreed to notice of his desire to termi
CONSIDERATION. manufacture for the defendant nate the service. The employers cement, and the defendant, on agreed to pay on Saturday night condition of his faithfully per- in every week during the term all forming the aforesaid contract, such wages as the articles made covenanted to pay the plaintiff the by Whittaker amounted to. There weekly sum of £1 during the two was a proviso that either party years following the date of the to the agreement might, after agreement, and the weekly sum of twelve months, give three months' £5 during the next year follow- notice. Held that the agreement ing, and to receive him into part- might be enforced by magistrates nership, &c., at the expiration of under the 4 Geo. IV., c. 34, and three years. Plaintiff also agreed was not void for want of mutuality to instruct defendant in the art of (Elderton v. Emmens (1847), 4 manufacturing cement on
C. B. 479; (1848), 6 C. B. 160 ; dition that defendant should not (1853), 4 H. of L. 624. Count engage in the manufacture other- in a declaration on assumpsit on an wise than under plaintiff's manage- agreement that in consideration ment, or with his consent. By a that the plaintiff had agreed to deed subsequently executed, de- become the permanent solicitor of fendant covenanted with plaintiff the defendant's company for reto perform the several stipulations ward, &c., the company promised and agreements in the first agree- to retain and employ the plaintiff ment. Breach alleged that de- as such permanent solicitor, &c. ; fendant wrongfully discharged breach, that the company wrongplaintiff from the service of de- fully refused to continue him in fendant, and prevented him from his employment as the solicitor of manufacturing cement, &c. Noim
This count not plied covenant to retain the plain- supported by proof of a resolution tiff two or three years in the de- that plaintiff * be appointed perfendant's service, though the de- manent solicitor to the company ; fendant was bound by the express permanent” meaning "no other words to pay the plaintiff the than a yeneral employment, as stipulated wages during those distinguished from an occasional periods, if he performed, or was employment in particular matters:” ready and willing to perform, the Wilde, C. J. Second count on an condition precedent on his part. agreement that, "from January The principle affirmeil in the case then next the plaintiff, as the is highly doubtful. The Courts attorney and solicitor of the to-day would no doubt imply a company, should receive a salary covenant to retain.
of £100 per annum in lieu of renDunn v. Sayles (1814), 5 Q. B. dering an annual bill of costs for 685. Deed by which plaintiff general business transacted by him covenanted that his son should for the company as such attorney serve the defendant for five years and solicitor, and should for such from the date of the agreement in salary advise and act for the the art of a dentist-surgeon, and company on all occasions in all attend for nine hours a day, and matters connected with the comthe defendant, in consideration of pany, and he should attend the the services to be performed by secretary and the board of directors the plaintiff's son, covenanted when required.” The Court of pay certain wages. Breach that Common Pleas arrested judgment the defendant refused to permit on a count for wrongful dismissal the son to remain in his service. setting forth this agreement. The
CONSIDERATION. Held, on motion in arrest of Exchequer Chamber reversed the judgment, that there
judgment of the Common Pleas; covenant corresponding to the the House of Lords affirmed the breach. See, however, McIntyre judgment of the former. The v. Belcher, 32 L. J. C. P. 254; company was bound to continue Worthington v. Sudlow, 31 L. J. the relation for a year, but not Q. B. 134 ; and Crompton, J., in bound to supply plaintiff with Emmens v. Elderton, 4 H. of L., business as solicitor, or employ
him when it had occasion to emPayne v. New South Wales Coal, ploy solicitor. d'e., Co. (1854), 10 Ex. 283. De- Whittle v. Frankland (1862), 31 fendants agreed with plaintiffs that L. J. M. C. 81; 2 B. & S. 49; 5 plaintiffs should have defendants' L. T. N. S. 639. Agreement by ship-brokering business at Sydney appellant to serve the respondent upon certain terms, and that de- exclusively until the expiration of fendants would provide plaintiff's twenty-eight days' notice, and, on with free passage to that port; the part of the respondents, to pay roid, plaintiff's not being bound to wages fortnightly, and not to disserve defendants.
charye without twenty-eight days' notice; implied promise to find appellant work.
Thomas v. Vician (1873), 37 J. P. 228. T. agreed to serve V. for a year ; hut if V. ceased to carry on works from being unable to find ore, or from any other cause, V. to be at liberty to terminate the contract. See also Ex parte Bailey (1854), 3 E. & B. 607.