Henschke v. Moore

Citations

• 257 Pa. 196
• 101 A. 308

Syllabus

<p>Contracts — Restraint of trade — General restraint — Partial restraint — Validity—Consideration—Equity—Injunction—Refusal.</p> <p>1. The law of Pennsylvania observes the distinction between contracts in general restraint of trade and those in partial restraint of trade. A contract in general restraint of trade covers the entire country, while a contract in partial restraint of trade covers only a small area. While contracts in general restraint of trade are void, contracts in partial restraint of trade will be sustained if reasonable.</p> <p>2. A contract which attempts to re_strain a party from engaging in a business which has previously been open to him in common with the general public is unreasonable and such restriction will not be enforced by the courts.</p> <p>3. A contract in restraint of trade, unlimited as to time, must be regarded as extending the restraint further than is necessary for the reasonable protection of the covenantee and is void.</p> <p>4. A contract granted the sole and exclusive right to manufacture and use a patented apparatus for feeding horse hair from a bundle to a wrapping device. The contract further provided that in case the license were surrendered “the licensee will not thereafter, either directly or indirectly, engage in the business of manufacturing or selling the same or any competing material in the United States.” Upon the surrender of the license, the former licensee engaged in the business of manufacturing and selling horse hair yarn. The former licensor brought a bill in equity to enjoin defendants from violating the provisions of the contract. Held,, that the contract was unreasonable restraint of trade in that .it attempted to restrain defendant from engaging in a business throughout the United States, which prior thereto, he had a right to engage in, and the restraint was in other respects larger than necessary for the protection of the licensor, and the excessive restraint was without consideration.</p>