Court case[1894] AC 535

Nordenfelt, an inventor and manufacturer of guns and ammunition with customers among the governments of the world, sold his business to a company for a large sum and covenanted that for 25 years he would not engage in the manufacture of guns or ammunition anywhere in the world, nor in any business competing with the company. He later joined a rival concern and the company sought an injunction.

The House of Lords held the covenant against making guns and ammunition enforceable, though the wider promise not to compete "in any way" was too wide and was severed. Lord Macnaghten restated the law: all interference with individual liberty of trade is prima facie void, but a restraint is enforceable if it is reasonable in reference to the interests of the parties and reasonable in reference to the interests of the public. Given the worldwide and governmental nature of the trade, a worldwide restraint was no more than the purchaser reasonably needed to protect the goodwill it had bought.