The Calcutta Law Journal May 16 & June 1 1912

The performance of the covenant is necessarily an act either of omission or commission and the act contemplated thereby may restrain the trade (i) of the covenantor (2) of the covenantee (3) of a third person. [...] The performance of a covenant in restraint of trade therefore is a direct restraint on the trade of the promisor or promisee and is an indirect restraint on the trade of those other parties whose freedom of trade may be diminished by the performance of the covenant. [...] The performance of the covenant wo pld be to that extent a restraint on the trade of the person buying or selling the article in question from the covenantee or from others engaged in the same selling or buying because the abstaining from trade would remove a competitor and thus indirectly restrain the freedom of trade of the person or persons buying or selling the article in questicin. [...] In this case therefore it is not that the purchase of the business of a rival is void nor that the purchase of all competition is void but that the purchase is made by a combination because the law rightly fears that the power of a combined number of persons is so much greater than that of an individual that the chances of their obtain ing a monopoly by such purchase is correspondingly greater [...] The covenant is usually made by the vendor as an additional inducement to the vendee to take over the business but may also be made by the vendee (b) and it generally takes the form of an undertaking not to engage in the business which is the subject of the sale.