Shuttleworth v Cox Bros & Co (Maidenhead) Ltd

This is a landmark English contract law case concerning the enforceability of contracts that restrain trade. The case revolves around the question of whether a restrictive covenant imposed on a vendor of a business is valid and enforceable, particularly concerning its duration and geographical scope.

In Shuttleworth v Cox Bros & Co (Maidenhead) Ltd, the plaintiff, Shuttleworth, sold his business to the defendant company, Cox Bros. As part of the sale agreement, Shuttleworth agreed to a restrictive covenant that prevented him from carrying on a similar business within a defined geographical area for a specified period. The company sought to enforce this covenant against Shuttleworth.

The court examined the reasonableness of the restrictive covenant. A restrictive covenant is considered reasonable if it is no wider than is necessary to protect the legitimate interests of the purchaser (in this case, Cox Bros). The court will consider factors such as the nature of the business, the geographical area covered by the restriction, and the duration of the restriction. The burden of proof lies on the party seeking to enforce the covenant (Cox Bros) to demonstrate that it is reasonable.

The significance of Shuttleworth v Cox Bros & Co (Maidenhead) Ltd lies in its clarification of the principles governing the enforceability of restrictive covenants. It reaffirms the principle that such covenants are prima facie void as being in restraint of trade, but they can be upheld if they are reasonable in the interests of the parties and the public. The case serves as a key precedent for determining the validity of restrictive covenants in commercial contracts, providing guidance on assessing the scope and duration of such restrictions.