Section 40Chapter V

Agreements in restraint of trade

INCOMING AND OUTGOING PARTNERS

(2)

A partner may make an agreement with his partners that on ceasing to be a partner he will not carry on any business similar to that of the firm within a specified period or within specified local limits; and, notwithstanding anything contained in section 27 of the Contract Act, 1872, such agreement shall be valid if the restrictions imposed are reasonable.