httpscoreacuk In Murugesan v Krishnasamy where a

Httpscoreacuk in murugesan v krishnasamy where a

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for a void contract, it must be a major illegality. ( download/pdf/11781198.pdf ) In Murugesan v Krishnasamy , where a contract contains an illegal term, the lawful part of the contract can be severed from the unlawful
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part thus enabling the plaintiff to sue on a promise unaffected by any illegality. (B) Restraint of Trade: s.28 1. A contract in restraint of trade is an undertaking where one party agrees not to trade or conduct his profession or business in a particular area for a specified period. 2. In English law, a contract which is in restraint of trade is void unless it can be shown to be reasonable in the interest of the parties and in the interest of the public. In Nordenfelt v Maxim Nordenfelt [1984] , the HOL held that the reasonableness of a clause in restraint of trade depends on all the facts if each case. In this case, the HOL upheld a worldwide restraint because the number of manufacturers in that particular business of manufacturing guns and ammunitions was limited. 3. In Malaysia, s.28 provides that any clause in an agreement where anyone is restrained from exercising a lawful profession, trade, or business of any kind, is void. The position under the Act is different from the common law position. Under s.28 , all contracts in restraint of train are void unless it comes within one of the 3 exceptions. If there is a restraint of trade clause, the contract is only void to the extent of the clause. 4. The restraint of trade in common law has the permissive approach, where the restraint of trade is allowed but provided it is reasonable.
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Whereas the Malaysia law has a rather more restrictive approach, the restraint of trade is not allowed unless one of the exceptions apply. 5. Remember, the UK cases are not applicable in this session because those cases are decided based on reasonableness basis. 6. So, exceptions to the general rule, i.e. the clause in restraint of trade is not void ( is allowed ) where there is: (a) an agreement not to carry on business of which goodwill/business is sold: One party who sells the goodwill of a business may agree with the buyer to refrain from carrying on a similar business within specified local limits. The limits must appear to the court to be reasonable regard being had to the nature of the business. This exception only applies where there is a contract between a vendor and a purchaser and the vendor is selling the goodwill of the business. (b) an agreement between partners prior to dissolution: Not to carry on a similar business similar to that of the partnership within specified the local limits. (c) an agreement during continuance of partnership: partners may be agree that some one or all of them will not carry on any business, other than that of the partnership, during the continuance of the partnership. (d) The negative covenant clause should be distinguished from the restrain trade clause. The negative covenants operating during the currency of the employment contract when the employee is bound to serve the employer exclusively are generally not regard to restraint of trade and therefore do not fall under s.28. s. 28
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  • Winter '17
  • Daniel

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