"Every agreement in which anyone is restrained from exercising a lawful profession, trade or business of any kind is, to that extent, void." Discuss.

Section 27 of the Indian Contract Act, 1872 states that every agreement by which any one is restrained from exercising a lawful profession, trade or business of any kind, is, to that extent, void. If the restraint is one which is really necessary for the carrying on business, the same is not prohibited. Other type of restrains are personal covenants between an employer and his employee whereby the latter agrees not to compete with the former or serve with any of his competitors after employment. If restraint was necessary for the protection of the company's interests then the agreement is not void. Restraint beyond the term of service would be void and the only ground on which it can be justified is by showing it is necessary for the protection of the employer's goodwill. The words "to that extent" in Section 27 make it clear that if in an agreement there are some convenants which are prohibited whereas the others are not and if the two parts can be separated then only those convenants which operate as restraint of trade would be void and not whole of the agreement itself. To illustrate, in Brahmputra Tea Co. Ltd. v. Scarth (1885) I.L.R. Cal. 545 , the employee agreed with the employer firstly, not to compete with latter after leaving the job and, secondly, not to injure employer's interest during employment. The Court held that the first condition is a restraint of trade but the second is binding.