NM Financial Management Limited v Marshall: CA 13 Mar 1997

The court considered a provision that a commission agent would be paid commission following the termination of his agency provided that he did not within a year become an independent intermediary or work for a competitor. Here the suspension of payment was directly related to the agent’s activity after he had ceased to act for the principal, and was held to be in restraint of trade as it could not be justified as in reasonable protection of the principal’s trade interest.
Millett LJ observed: ‘Although the question is described as one of severance it is important to bear in mind that we are not concerned to decide how much of an offending restriction should be struck down. In such a case the question is to what extent can the party who imposed the restriction enforce those parts of it which are not in unreasonable restraint of trade. We are concerned with a very different question, namely, whether the party who has been freed from an invalid restraint of trade can enforce the remainder of the contract without it.’
It was the employee (or agent) who was seeking severance in the Sadler and Marshall cases; and therefore there was no relevance in the public policy reasons for restricting severance when sought by overbearing employers who had required their employees to subscribe to extravagant restraints.


Millett LJ


[1997] EWCA Civ 1237, [1997] IRLR 449, [1997] 1 WLR 1527, [1997] ICR 1065




England and Wales


Appeal fromMarshall v NM Financial Management Ltd ChD 10-Jul-1995
A post-termination restriction on an employment was in restraint of trade and ineffective despite a payment having been made for the restriction. The agent was not entitled to any commission after termination under the relevant clause.
Mr . .
CitedSadler v Imperial Life Assurance Co of Canada Ltd QBD 1988
The defendant employed the claimant as an insurance agent on commission, to be calculated by reference to premiums paid to the defendant for the first ten years under any policy which he had procured. A clause of the contract stated that, if in . .

Cited by:

CitedFutter and Another v Revenue and Customs; Pitt v Same SC 9-May-2013
Application of Hastings-Bass Rule
F had created two settlements. Distributions were made, but overlooking the effect of section 2(4) of the 2002 Act, creating a large tax liability. P had taken advice on the investment of the proceeds of a damages claim and created a discretionary . .
CitedTillman v Egon Zehnder Ltd SC 3-Jul-2019
The company appealed from rejection of its contention that its former employee should be restrained from employment by a competitor under a clause in her former employment contract. . .
Lists of cited by and citing cases may be incomplete.


Updated: 10 April 2022; Ref: scu.141633