[1] Lord Macnaghten said the following: The learned judges of the Court of Appeal have come to the conclusion that the earlier part of the covenant is valid.

Lindley LJ expressed his opinion that the doctrine “that the only test by which to determine the validity or invalidity of a covenant in restraint of trade given for valuable consideration was its reasonableness for the protection of the trade or business of the covenantee” was “the doctrine to which the modern authorities have been gradually approximating.” But he could not, he said, “regard it as finally settled, nor, indeed, as quite correct.” He thought it ignored “the law which forbids monopolies and prevents a person from unrestrictedly binding himself not to earn his living in the best way he can.” In the particular circumstances of the present case he considered that the earlier part of the covenant was not contrary to public policy.

Contracts in general restraint of trade he defined as “those by which a person restrains himself from all exercise of his trade in any part of England.” “Scores of cases,” he added, “have proceeded on this basis, and those who dispute the rule can only do so, as it seems to me, by disregarding the judgments and opinions of an uncounted number of unanimous common law judges.” But then he thought that the rule, being a rule based on reason and policy, might admit of exceptions; and treating the present case as an exception, he, too, thought the agreement limited to the first part of the covenant reasonable in itself and not contrary to public policy.

Assuming the rule to be that general restraints are void as being contrary to public policy, and not on any other ground, an exception must surely arise, if exceptions are admissible at all, as soon as you find that the particular case under consideration is not contrary to public policy, and so not opposed to the principle on which the rule is founded.

Thinking, as I do, that the distinction, if it exists, is of no practical importance, I should have been content with expressing my concurrence in the result at which the Court of Appeal have arrived, if it had not been for certain passages in the very able and elaborate judgment of the late Lord Bowen, from which I respectfully dissent.

[...] In the age of Queen Elizabeth all restraints of trade, whatever they were, general or partial, were thought to be contrary to public policy, and therefore void (Colgate v. Bacheler[2]).

But there are exceptions: restraints of trade and interference with individual liberty of action may be justified by the special circumstances of a particular case.

It is a sufficient justification, and indeed it is the only justification, if the restriction is reasonable—reasonable, that is, in reference to the interests of the parties concerned and reasonable in reference to the interests of the public, so framed and so guarded as to afford adequate protection to the party in whose favour it is imposed, while at the same time it is in no way injurious to the public.

It was laid down in Mitchel v. Reynolds[3] that the Court was to see that the restriction was made upon a good and adequate consideration, so as to be a proper and useful contract.

As late as 1793 it was argued that a restriction which included a country town, and extended ten miles round it, was so wide as to be unreasonable.

But it used to be laid down that the correspondence must be exact, and that it was incumbent on the plaintiff to shew that the restriction sought to be enforced was neither excessive nor contrary to public policy.

The difficulty is much greater when the question of public policy is considered at large and without direct reference to the interests of the individual under restraint.

I do not find that this passage has ever been questioned, nor is there in the books, so far as I can discover, any authority conflicting with it, except the judgment of Lord Bowen in the present case.

[...] Now, in the present case it was hardly disputed that the restraint was reasonable, having regard to the interests of the parties at the time when the transaction was entered into.

Mr. Nordenfelt has “committed industrial suicide,” and as he can no longer earn his living at the trade which he has made peculiarly his own, he may be brought to want and become a burden to the public.

: “If the contract is a reasonable one at the time it is entered into we are not bound to look out for improbable and extravagant contingencies in order to make it void": Rannie v.

I think that the restraint in the present case is reasonable in every point of view, and therefore I agree that the appeal should be dismissed.Following Nordenfelt restraint of trade clauses were prima facie void at common law, but they may be deemed valid if three conditions are met: The question on severability was whether the reasonable restriction could be enforced when it was in the same contract as an unreasonable and unenforceable restriction.

The court used the test of whether striking out (with a blue pencil) words containing unreasonable provisions would leave behind a contractual obligation that still made sense.

An unreasonable restraint is severable, and the court enforced the amended agreement that Nordenfelt "for the next 25 years, would not make guns or ammunition anywhere in the world , and would not compete with Maxim in any way" thus permitting him to trade in those very items in direct competition with Maxim, illustrating the limited practical utility of the rule under its strike-out only stricture.