Algol and Altair intend purchasing a rival tourism business from a local entrepreneur. They wish to ensure that he cannot set up a competing travel business or tourism venture within 12 months after the purchase or they believe that the investment will not be viable.

Required: Advise Algol and Altair as to how far they can go with respect to restraining the vendors freedom of trade. What if they go too far?

Questions to Consider:

What area of law is the question concerned with?

Is a contract in restraint of trade valid or void?

If a contract in restraint of trade is prima facie void, what does this mean?

How can Algol and Altair protect themselves then? What factors determine whether a restraint is reasonable?

What is the effect on Algol and Altair if the clause they insert is not reasonable?

See Nordenfelt v Maxim Nordenfelt Guns and Ammunition is it a useful precedent here?

It's from Australia.