Abstract
This dissertation focuses on how restraint of trade agreements in employment contracts have been received and cemented in South African law. The use of the term “cemented” is important as pre 1984, the place of these types of agreements in the field of South African law was uncertain. This was due to these clauses having had its foundations in English law. For many, the decision in Magna Alloys and Research (SA) (Pty) Ltd v Ellis1 was welcomed as it stated unequivocally that restraint of trade clauses are in fact part of South African law. The dissertation explores the initial position on these types of agreements by referring to precedents. A major part of the paper will be centred on determining the influence that the onset of the 1996 Constitution of the Republic of South Africa has had on these clauses after Magna Alloys and Research (SA) (Pty) Ltd v Ellis.2 For example, how did the Constitution influence subsequent cases dealing with the enforceability of restraint of trade agreements? What did the Constitution change and improve? Are there any similarities between the previous position and the existing position?
This paper will conclude by conducting a comparative analysis of the position of these agreements in England and Zambia. What is significant to note is that Zambia and South Africa are similar in the sense that both jurisdictions have English law foundations. Both countries were colonies of Britain.
The position of English law on these types of agreements was firmly set out in Esso Petroleum Co Ltd v Harper’s Garage (Stourpot) Ltd.3 This case will be a focal point when discussing, comparing and contrasting the English position to that of the South African and Zambian positions. What is interesting to note is despite similar historical background the two countries have taken different approaches to restraint of trade clauses with the former totally departing from traditional approaches. This paper will show how interpreting constitutional provisions have had an effect on how these legal systems have received agreements in restraint of trade.
LL.M.