Restraint of trade in South Africa: is it enforceable?
5 min read · General information, not legal advice
Quick answer
Yes, a restraint of trade can be enforced in South Africa, but only if it is reasonable. Since Magna Alloys v Ellis (1984), courts start from the position that a restraint is valid, and the person who wants to escape it must show it is unreasonable and against public policy.
What courts weigh
Following Basson v Chilwan (1993), a court asks: does the employer have a protectable interest (trade secrets, confidential information, customer connections)? Is that interest threatened by the former employee? Does the interest outweigh the person's right to earn a living? And is there any other public-policy reason to enforce or reject it?
What makes a restraint unreasonable
A restraint that covers the whole country when the business only trades in one city, lasts for years without a reason, or simply stops competition without protecting any confidential information or client relationships, is likely to be cut down or refused. Courts can enforce only part of a restraint.
How to write one that holds up
Name the specific interest you are protecting, keep the area to where you actually trade, keep the period short (often 6 to 12 months for ordinary staff), and list the specific clients or activities covered. Pair it with a confidentiality clause or NDA.
Free to fill in
Restraint of Trade Agreement
Fill it in online free, preview it as you go, then download Word + PDF from R199.
Frequently asked questions
Can my employer stop me working for a competitor?
Only if the restraint protects a real interest like client relationships or confidential information, and its area and period are reasonable.
How long can a restraint of trade last?
There is no fixed limit in law. The shorter and more targeted it is, the more likely a court will enforce it.
Does a restraint apply if I was dismissed?
It can, but courts consider the circumstances. An unfair dismissal may count against enforcing it.
