Introduction

Contracts are agreements that are legally enforceable and which legally binds two or
more individuals.

Three types of agreements which have been expressly rendered void in the Contracts Act 1950 despite being
not necessarily unlawful, including the agreements in restraint of marriage, restraint of trade and restraint of
legal proceedings.

Based on the English Law, these agreements would’ve been classified as illegal contracts and void under the
public policy which are being enforced in Malaysia.

Restraints which legitimately create limitations on the rights of one party to impose conditions, yet at the
same time, allow some restrictions to be enforced. These are related to marriage, trade and legal
proceedings.

Restraint of trade refers to activity that has obstructions, limitations, or eliminates competition in a
particular market.

Legal proceedings are related to proceedings that permit a person to lawfully enter into a lawsuit which has
been already in progress

Basis comes to application when there is an admission of a person who is not an original party to the
lawsuit.

Performed so that the person can protect some right or interest that is allegedly affected by the proceedings.
 Conclusion
• Upon the completion of this project, we are able to better understand about the agreements in restraint of
trade alongside legal proceedings.

• We have been able to obtain knowledge which are inclusive of the basic definition of both these
agreements, the effect of restraint covenants, the three most important conditions in agreements involving
restraint of trade which including interest to protect, restraint should be reasonable and not contradictory to
the public interest, the effects of legal proceedings, competition law and antimonopoly.

• From the vast amount of information we have obtained, we can deliberately conclude that the functions of
restraint of trade agreements and legal proceeding agreements are important in many different aspects
especially in contacts involving employment which are widespread, however still remain as a controversial
issue.

• The reason for the argument with contrary opinions is that the restraint agreement involves two different,
key legal principles.

• Restraint of trade agreements will restrict or limit that freedom by preventing the employee to practice a
trade in a particular industry and usually within a specified geographical area.

• Besides, differentiation in the types of law such as UK English Law, Indian law and Common law will
produce a difference in the existing and future conclusion of judgments.

• Therefore, we need to be alert within the surroundings on what has occurred as it might cast effects all
around us.