Rules Of Reason

Rules of reason, the 'rule of reason' normally requires an ascertainment of the facts or features peculiar to the particular business; its condition before and after the restraint was imposed; the nature of the restraint and its effect, actual or probable; the history of the restraint and the evil believed to exist, the reason for adopting the particular restraint and the purpose or end sought to be attained and it is only on a consideration of these factors that it can be decided whether a particular act, contract or agreement, imposing the restraint is unduly restrictive of competition so as to constitute 'restraint of trade', Mahindra and Mahindra Ltd. v. Union of India, AIR 1979 SC 798: (1979) 2 SCC 529: (1979) 2 SCR 1038.