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Mutiso owned a bakery in Kangundo Town. He sold it last year to Munyao. He agreed, as part of the sale, not to carry on a...

      

Mutiso owned a bakery in Kangundo Town. He sold it last year to Munyao. He agreed, as
part of the sale, not to carry on a bakery business for a period of 3 years within 200 miles
radius of the bakery he had sold. He has now decided to open a bakery in Machakos Town
and seeks your advice as to whether he can legally do so. What advice would you give him?

  

Answers


Maurice
This problem is based on contracts in restraint of trade.

It is evident that Mutiso covenanted not to set up a similar business within a radius of 200
miles from Munyao's business for 3 years.

The legal issue is whether Mutiso can open a similar business in Machakos town which is
less than 100 miles from Kangundo.

As matters stand, Mutiso is bound by the contract with Munyao and cannot legally open the
bakery.

However because this restraint is too unfair to Mutiso, I will advise him to apply to the High
court for the contract to be declared void pursuant to section 2 of the Contracts in Restraint
of Trade Act.

My advise is based on the above statute as the restraint is unreasonable. It confers upon
Munyao more protection than is reasonably necessary.
maurice.mutuku answered the question on May 2, 2018 at 11:55


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