What did the court decide in Charlesworth v. MacDonald (1899)?

The Bombay High Court granted an injunction restraining the defendant from practicing in Zanzibar during the agreed employment period.

Why is Section 27 of the Indian Contract Act discussed here?

Because the case clarifies that contracts of personal service for a fixed term are outside the usual restraint-of-trade bar under Section 27.

Was there a written, signed agreement?

No formal signed document was executed, but the parties acted on clear terms—thus the court enforced those terms.

What practical lesson does this case offer students?

Courts can enforce reasonable service restraints tied to an ongoing employment term, even if the contract formality was imperfect.

Does misrepresentation defeat the agreement here?

On the facts, the court did not find misrepresentation that would void the engagement; the injunction was still granted.

Charlesworth v. MacDonald (1899) ILR 23 Bom

Charlesworth v. MacDonald (1899) ILR 23 Bom 103

Restrictive covenants in a fixed-term employment contract and why Section 27 ICA does not bar such service restraints during the term.

Bombay High Court 1899 Bench: Single Employment / Contract Citation: ILR 23 Bom 103 5–6 min

Author: Gulzar Hashmi • India • Published: 25 Oct 2025

Quick Summary

This case is about a doctor’s assistant hired for three years in Zanzibar. There was no signed contract. Yet both sides followed clear written terms. After a fallout, the assistant started his own practice in the same place. The employer asked for an injunction.

Held: The court enforced the fixed-term arrangement and restrained the assistant from practicing in Zanzibar during the agreed period. The court treated the restraint as part of a personal service contract and not a general restraint under Section 27 of the Indian Contract Act.

Issues

Was there a binding agreement between the parties?
If a three-year agreement existed, was it obtained by misrepresentation by the plaintiff’s agent?
Is the plaintiff entitled to an injunction in any case?

Rules

A restrictive covenant tied to a fixed-term contract of personal service does not fall within the general prohibition of restraints of trade under Section 27, Indian Contract Act, when it operates during the agreed term and is necessary to make the engagement effective.

Exam tip: Distinguish “during-term” restraints (often enforceable) from “post-termination” restraints (commonly void unless narrowly justified by later case law).

Facts — Timeline

Zanzibar

Oct 1895

Plaintiff (a physician in Zanzibar) asks his brother in London and Dr. Scott to find an assistant.

Offer Terms (Document, unsigned)

Three-year agreement; first-class passage out and home; £200 per year + board and lodging; half-pay during travel.

Interview

Defendant hears of the post; meets Stockman (connected with the search) in Edinburgh.

Engagement Begins

Defendant goes to Zanzibar and works under the stated terms (Exhibits A & B). No formal signed contract.

Dispute

After about a year, disagreements arise. Defendant leaves and starts independent practice in Zanzibar.

Suit

Plaintiff seeks an injunction to stop the defendant from practicing during the engagement period.

Case timeline for Charlesworth v. MacDonald (1899)

Arguments

Appellant / Plaintiff

There was a clear three-year engagement on defined terms.
The restraint only ensures faithful service during the term.
Without an injunction, the business and goodwill suffer unfairly.

Respondent / Defendant

No formal signed contract; terms should not bind strictly.
Alleged misrepresentation by the plaintiff’s agent.
Restraint is void under Section 27 ICA as restraint of trade.

Judicial reasoning illustration for Charlesworth v. MacDonald

Judgment

The court granted an injunction restraining the defendant from practicing as a physician and surgeon in Zanzibar during the period of his engagement. Costs were awarded to the plaintiff.

The court noted the absence of a formal signed contract, but held that the parties’ conduct and documents showed a binding engagement with definite terms.

Ratio Decidendi

A restraint that simply secures performance of a fixed-term personal service is enforceable and does not offend Section 27 ICA. The focus is on making the engagement workable, not on suppressing trade after the term.

Why It Matters

Shows how courts treat “during-term” restraints differently from “post-term” restraints.
Emphasizes substance over form: clear terms + conduct can create binding obligations.
Useful for service industries where location and goodwill are sensitive.

Key Takeaways

Even without a signed contract, clear terms acted upon can bind.
Section 27 does not block restraints that secure ongoing service during a fixed term.
Injunctions can protect the employer’s practice and goodwill.

Mnemonic + 3-Step Hook

Mnemonic: “DOC-TERM-SAFE” — DOCtor, fixed TERM, restraint is SAFE during term.

Identify fixed-term personal service.
Check that restraint works only during the term.
Apply Section 27 exception logic → injunction possible.

IRAC Outline

Issue: Agreement? Misrepresentation? Right to injunction?

Rule: During-term restraints in fixed-term personal service do not violate Section 27 ICA.

Application: Parties acted on clear three-year terms. No misrepresentation proved to defeat the engagement. Restraint needed to protect the employer’s practice during the term.

Conclusion: Injunction granted; defendant restrained from practicing in Zanzibar for the remainder of the term.

Glossary

Restrictive Covenant: A clause that limits certain actions, e.g., competing practice, to protect legitimate interests.
Section 27 ICA: Provision that generally voids agreements restraining trade, with limited exceptions.
Injunction: A court order directing a party to do or stop doing something.