Section 30

Section 30 of the Indian Contract Act, 1872, provides an exception to the rule that agreements in restraint of trade are void. According to this section, 'One who sells the goodwill of a business may agree with the buyer to refrain from carrying on a similar business, within specified local limits, so long as the buyer, or any person deriving title to the goodwill from him, carries on a like business therein, provided that such limits appear to the Court to be reasonable, regard being had to the nature of the business.' The section allows a seller of goodwill to agree not to carry on a similar business within specified local limits, provided the limits are reasonable. The court in the case of Madhubhai Amathalal Gandhi v. Hiralal Ratilal Gandhi observed that an agreement in restraint of trade is void, unless it falls under the exception provided in Section 30.