DeAndre Inc runs a bakery in La Ronge, Saskatchewan.He bought the bakery from King's Bakery Inc.In the sale agreement, DeAndre agreed not to sell bakery products outside of La Ronge.Business is good, however, and DeAndre wants to expand.He is not interested in competing with King's Bakery, which now sells its products exclusively in Regina, Saskatchewan.King's Bakery does hope, however, to expand into other markets.DeAndre wants to know if he can successfully challenge the contractual term that restricts him selling in La Ronge.
A) Probably.Restraints on trade are permissible, but they are scrutinized by the courts to ensure that they do not unduly restrict competition.Here, restricting DeAndre to selling bakery products in La Ronge is probably more restrictive than is necessary to protect the commercial interests of King's Bakery.
B) Probably not.Restraints of trade are dealt with exclusively as criminal matters by the Commissioner of Competition under the Competition Act.
C) Probably.The contractual term is a restraint on trade.That type of term may provide a private benefit, but it is never in the public interest.
D) Probably not.Unless a crime is committed, the public's interest in freedom of contract outweighs the public's interest in freedom of competition.
E) Probably.The contractual term is a regulatory offence.
Correct Answer:
Verified
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