Jurisdiction(s):
United Kingdom

Related legal acts

Key definition

Restrictive Covenant definition

What does Restrictive Covenant mean? A restrictive covenant is a promise not to carry out specified acts. In practice it arises chiefly in land transactions and in employment or commercial agreements. The expression is descriptive and shaped largely by case law, with statutory frameworks for registration and modification. Land law (England & Wales and Northern Ireland): a negative covenant affecting land use may bind successors in equity if it benefits identifiable land and “touches and concerns” it, the original parties intended the burden to run, and a successor takes with notice (now usually via registration). Protection is by entry of a notice on the registered title,...

Restrictive covenants in commercial contracts: key UK restraint of trade case law across franchises, distribution, agency, supply, corporate transactions, partnerships, media, property, finance and trade mark licensing

Published by a LexisNexis Commercial expert

Practice notes

This Practice Note

This Practice Note distils rulings on when restraint of trade provisions (restrictive covenants) in commercial and corporate agreements are enforceable. For fuller detail on restrictive covenants and the restraint of trade doctrine in commercial arrangements, also see Practice Note: Restrictive covenants and restraint of trade in commercial contracts. For a companion Practice Note outlining decisions on the enforceability of post-termination restraints (restrictive covenants) in employment contracts, see Practice Note: Decisions on post-termination restrictions and garden leave in employment contracts. This Practice Note also references certain key judgments reached under EU competition law. From 1 January 2021, EU competition law no longer applies directly in the UK. Where an agreement impacts trade within the UK, Chapter I of the Competition Act 1998 (CA 1998) will govern. The Chapter I prohibition bans anti-competitive agreements and is modelled on Article 101 of the Treaty on the Functioning of the European Union (TFEU). EU case-law is still likely to remain relevant, but from 1 January 2024 the Retained EU Law (Revocation and Reform) Act 2023 (REUL(RR)A 2023) brought in fresh tests for courts assessing whether to depart from assimilated case law, together with procedures for addressing issues of assimilated law. For...

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Web page updated on 21/05/2026

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