October 2016 restraints of trade and good faith revisited

In the last few years, in three well publicised cases, the High Court has granted interim injunctions to uphold restraint of trade clauses . In the most well publicised of those three cases, Health Club Brands Ltd v Colven Botany Ltd  (the Club Physical franchise system), the High Court sent a very strong message to a franchisee who had wrongly cancelled their franchise agreement, that illegal behaviour followed by breach of a restraint of trade clause would not be tolerated. That case served as a sobering reminder to franchisees (and those advising franchisees) of the need to ensure there are legitimate grounds of cancellation before seeking to terminate a franchise agreement.

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