Esso petroleum v Harper's Garage(1968)


Esso Petroleum Co Ltd -v- Harpers Garage
The defendant ran two garages under solus agreements with the plaintiffs who complained when the defendants began to purchase petrol from cheaper alternative sources. The House was asked whether the solus agreements were be regarded in law as an agreement in restraint of trade.
Held: An agreement in restraint of trade is not generally unlawful if the parties choose to abide by it: it is only unenforceable if a party chooses not to abide by it. It was necessary to ascertain the legitimate interests of the landlords which they were entitled to protect and to discover whether those restraints exceeded what was adequate for that purpose.
Lord Hodson said: ‘When one remembers that the basis of the doctrine of restraint of trade is the protection of the public interest, it is not difficult to see how the law developed in its conception of reasonableness as the test which must be passed in order to save a contract in restraint of trade from unenforceability.’
Lord Reid said: ‘It has often been said that a person is not entitled to be protected against mere competition. I do not find that very helpful in a case like the present. I think it better to ascertain what were the legitimate interests of the appellants which they were entitled to protect and then to see whether these restraints were more than adequate for

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