Restraint of Trade

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Restraint of Trade

Contracts or combinations that tend, or are designed, to eliminate or stifle competition, create a Monopoly, artificially maintain prices, or otherwise hamper or obstruct the course of trade as it would be carried on if it were left to the control of natural economic forces.

As used in the Sherman Anti-Trust Act (15 U.S.C.A. § 1 et seq.), unreasonable restraints of trade are illegal per se and interfere with free competition in business and commercial transactions. Such restraint tends to restrict production, affect prices, or otherwise control the market to the detriment of purchasers or consumers of goods and services. A restraint of trade that is ordinarily reasonable can be rendered unreasonable if it is accompanied by a Specific Intent to achieve the equivalent of a forbidden restraint.

Cross-references

Antitrust Law; Combination in Restraint of Trade.

West's Encyclopedia of American Law, edition 2. Copyright 2008 The Gale Group, Inc. All rights reserved.

restraint of trade

n. in anti-trust law, any activity (including agreements among competitors or companies doing business with each other) which tends to limit trade, sales and transportation in interstate commerce or has a substantial impact on interstate commerce. Most of these actions are illegal under the various anti-trust statutes. Some state laws also outlaw local restraints on competitive business activity. (See: monopoly, trust)

Copyright © 1981-2005 by Gerald N. Hill and Kathleen T. Hill. All Right reserved.
References in periodicals archive ?
Lord Esher, Master of the Rolls, dissented, arguing that the case was analogous to Hilton and that restraints of trade were indictable conspiracies.
On its face, Mogul Steamship did not concern restraints of trade as it dealt with the tort of conspiracy.
On appeal, the Law Lords unanimously upheld the Court of Appeal decision, fatally undermining the distinction between general and partial restraints of trade. In its place, the Lords imposed a single reasonableness standard, borrowed from earlier partial restraint decisions.
All interference with individual liberty of action in trading, and all restraints of trade of themselves, if there is nothing more, are contrary to public policy, and therefore void.
Under Section 1, anyone who "conspires, combines, agrees or arranges" one of the specified restraints of trade has committed a misdemeanour.
There, only a single judge, Esher LMR, of the Court of Appeal panel, argued that restraints of trade were indictable conspiracies; (167) all other judges considering the case rejected the conflation of the doctrines.