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.

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)

References in periodicals archive ?
Indeed, between 1888 and 1889, "the law relating to restraints of trade [had been] for many years in a nebulous and uncertain form".
He stated that whether restraints of trade were reasonable turned not on the intentions of the parties, but on the means by which they sought to implement them:
Such a restriction cannot be justified upon any of the grounds on which partial restraints of trade have been supported.
103) In each of these cases, the contracting railway companies entered into agreements to share track, set common prices and divide profits along shared lines; in each case, the court found that the agreements were not unreasonable restraints of trade (though the agreements in Shrewsbury and Great Western were invalidated as ultra vires the powers delegated to the officers under the respective corporate charters).
Lord Esher, Master of the Rolls, dissented, arguing that the case was analogous to Hilton and that restraints of trade were indictable conspiracies.