A term in a contract that restricts a person’s right to exercise a trade or carry on business. Such a term is common, for example, in the sale of a business, where the seller agrees not to set up in competition with the purchaser. Contracts of employment often include a term restraining employees from working for the firm’s rivals for some period after they leave: this is to protect confidential commercial or technical information gained in the previous employment being passed to competitors. Agreements in restraint of trade are void in the UK unless the party relying on them can show that the restrictions are not unreasonable or contrary to public policy.