27. Covenants in restraint of trade.

Partnership agreements sometimes contain provisions prohibiting an outgoing partner from carrying on a similar trade or profession within specified limits of time and distance1. Such provisions are not enforceable unless the restrictions are reasonable2. In order to uphold a covenant in restraint of trade, the claimant must establish that: (1) he has a legitimate interest capable of being protected; (2) the restrictive covenants are no more than adequate to protect the interest (meaning not excessive as regards area, duration or prohibited activities); and (3) without the enforcement of such covenants, the interest or goodwill could be injured or damaged