Restrictive covenants in agency agreements

A Court of Appeal decision provides a useful example of restraint of trade in a contemporary business-to-business situation.

The court upheld clauses restricting the UK agent of a money transfer business from acting as agent for the principal’s competitors during the term of the agency agreement and, after termination, from offering services similar to those of the principal within five miles of the agent’s premises for a period of six months. The post termination restriction was reasonable because it was limited both in time and space and was necessary to protect the principal’s investment in training and supporting its agents.