Worked Solution
✓ VerifiedRelevant Provision: Section 27 of the Indian Contract Act, 1872 declares that every agreement by which anyone is restrained from exercising a lawful profession, trade, or business of any kind is, to that extent, void. The only statutory exception is in favour of the buyer of goodwill — a seller of goodwill may be restrained from carrying on a similar business within specified local limits, provided the restriction is reasonable.
Analysis of the Agreement: In the given case, X agreed with Y (a doctor practicing at Chennai) to serve as his assistant for 5 years. The restraint clause prohibited X from practicing on his own account in Chennai during the term of the agreement. This is a restraint operative only for the duration of service — not a post-service restraint.
Effect of Restraint During Service Period: A restraint agreed upon during an employment/service contract that operates only for the period of service is generally treated as a reasonable and valid restriction, as it is ancillary to the main contract of employment. The restriction does not permanently deprive X of his right to livelihood — it is limited in time (5 years) and in scope (practice on own account in Chennai). Such a clause is enforceable during the currency of the agreement.
Situation After Expiry of Term: The critical fact is that X began to practice on his own account only after the term of 5 years had expired. The agreement did not contain any post-service restraint clause prohibiting X from practicing after the expiry of the agreement. Y also sold the assistantship, effectively bringing the contractual relationship to an end.
Conclusion: Once the term of the agreement expired, the restraint clause became inoperative. There is no residual contractual obligation on X to refrain from practicing after the agreement ended. Any attempt to enforce such a restraint after expiry of the term would directly conflict with Section 27 of the Indian Contract Act, 1872, which renders agreements in restraint of trade void.
Therefore, X cannot be restrained from practicing on his own account in Chennai after the expiry of the 5-year term. The restraint was only co-extensive with the service agreement, and having served out the full term, X is free to exercise his lawful profession without restriction. Y (or the buyer of the assistantship) has no legal basis to prevent X from practicing independently.
Write it like this
1The skeleton
- Lead with Section 27 in your first line — write 'Section 27 of the Indian Contract Act, 1872' before anything else, because examiners are trained to tick the section citation immediately.
- State the rule + the ONE exception in one crisp line — 'every such agreement is void to that extent; the only exception is a seller of goodwill' — this shows you know the boundary of the law, not just the headline.
- Spot and flag the time-axis — the entire case turns on WHEN X started independent practice (after expiry), so you must explicitly separate 'restraint during service' from 'restraint after service' or the examiner cannot follow your logic.
- Apply the during-service position first — say the clause was valid and enforceable while the 5-year term ran, because a service-period restraint is ancillary and reasonable; this shows layered analysis, not a binary yes/no.
- Drive the conclusion with the expiry fact — once you state 'the term had already expired and Y sold the assistantship', the answer writes itself: the clause became inoperative, and enforcing it post-expiry would violate Section 27.
- End with one crisp verdict sentence — 'X cannot be restrained from practicing on his own account in Chennai after the expiry of the agreement' — examiners look for this line to award the concluding mark.
2Examiner-rewarded phrases
3Common trap
Most students read 'restraint of trade' and instantly write 'void under Section 27' without pausing to check WHEN the restraint operates — the during-service restriction was actually enforceable, and the whole case pivots on X acting only after expiry. If you declare the original clause void, you lose the analysis marks even if your final conclusion is right.