Legal Affairs

Shedding light on restraints of trade in sale of business agreements

As a general rule, it is lawful for parties to enter into very limited restraints of trade or non-compete arrangements when it is necessary to protect the goodwill of a business being sold. This is provided that the non-compete clause is reasonably limited in terms of duration, product scope and geographic market. Restraints not meeting these requirements, have been termed ‘naked market division’ arrangements, which are per se prohibited in terms of the Competition Act, No 89 of 1998.

Confusion over reinstatement value conditions

An insurer’s obligation to indemnify the insured does not arise until the insurer has elected whether to indemnify in money or by reinstatement. The election must be made within a reasonable time.

Bank held liable for the fraudulent conduct of a former director of its customer

A bank needs to ensure that a company has authorised its director to allow the company’s bank account to be debited each month, if the payments settle the director’s personal obligations.

Suicide not covered despite brain disease