The balance between the principle of pacta sunt servanda and section 22 of the Constitution in a restraint of trade agreement

Abstract

The focus of this discussion is whether there is still the need to enforce the restraint of trade agreements in their pre-Constitutional form. The dawn of the constitutional era has necessitated a re-examination of common law with a view to establishing whether the balance created by the latter (regarding this field) still exists. The Bill of Rights has obviously raised some doubts regarding the equilibrium desired between employer and employee interests. Section 22 of the Constitution is to the effect that everyone must be free to secure employment (as a fundamental right), whereas the common law restraint of trade agreements impose some bars to the operation of the said right. It is common course that the Constitution is more superior to common law, what remains a debateable issue is whether there are any reasonable limits that must be considered to justify the disregard of the Constitution. Serious arguments around the direct and indirect application of the Bill of Rights still persist and failure to resolve them would have the effect of excluding or weakening the application of the Bill to disputes arising in this field. In common law the enforcement of restraint agreements is sine qua non for the greater good of protecting the sanctity of contracts. Contractual obligations must be fulfilled unless it would be unreasonable to enforce same. The question of the onus to prove unreasonableness, which lies with the employee, turns to place an onerous burden on the employee. This coupled with the employee’s weaker bargaining power raises doubts as to whether the employee is in a better position to conclude a restraint of trade agreement. Common law does not consider or accommodate this concern in that its main object is the fulfilment of the agreement. It is believed that the Constitution has ushered in a new approach which focuses mainly on the fairness of the agreement itself. The enforcement of the agreement must pass the constitutional muster built in section 22 in order to ensure that there is equilibrium between the employer (the restrainor) and employee (the restrainee) interests. In the end this discussion explores whether it is justifiable to subject the Right to work (as provided by the Constitution) to the common law restraint which is opposed to the constitutional right. The circumstances under which the exclusion of section 22 is condonable are interrogated within the framework of conflicting case law.