restraint of trade

Legal Definition of restraint of trade

1 : an act, fact, or means of curbing the free flow of commerce or trade covenant not to compete with an employer after leaving is in restraint of trade and must be reasonable to be enforced
2 : an attempt or intent to eliminate or stifle competition, to effect a monopoly, to maintain prices artificially, or otherwise to hamper or obstruct the course of trade and commerce as it would be if left to the control of natural and economic forces the Sherman Antitrust Act declared every contract, combination, and conspiracy in restraint of trade to be illegal also : the means (as a contract or combination) employed in such an endeavor — see also horizontal restraint, per se rule sense 2, rule of reason, vertical restraint, Sherman Antitrust Act

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