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)