Key Takeaways
- A restraint of trade clause limits where, when or for whom someone can work, and in law it is unenforceable unless it is reasonable.
- Sport is full of such restrictions, from transfer rules and release clauses to salary caps and post-contract restrictions on coaches and staff.
- To be enforceable, a restriction must protect a legitimate interest, go no further than necessary and not be against the public interest.
- Landmark cases such as Eastham and Greig v Insole show that even long-standing sporting rules can be struck down if they go too far.
Professional sport runs on contracts, and many of them limit what an athlete, coach or club can do. A transfer system, a release clause, a salary cap, a term stopping a departing coach joining a rival. All of these restrict someone’s freedom to work, which puts them squarely in the territory of the restraint of trade doctrine.
That doctrine has a simple starting point. A clause that restricts someone’s freedom to trade is unenforceable unless it is reasonable. In sport, where careers are short and earning windows narrow, that question comes up again and again.
This guide explains what a restraint of trade clause is, how the reasonableness test works, how it has played out in some famous sporting cases and what it means today, so you can tell the difference between a clause that will hold and one that will not.
If you are drafting, relying on or challenging such a clause, our sports law dispute solicitors offer a free 30-minute consultation.
What is a restraint of trade clause?
A restraint of trade is any contractual term that restricts a person’s freedom to carry on their trade, business or profession. In sport that covers a wide range of things, including clauses that limit when and where a player can move, exclusivity over image rights, restrictions on a coach or executive joining a competitor after leaving, and arrangements that tie an athlete to a particular agent.
The law’s starting point is strict. A clause in restraint of trade is treated as void as contrary to public policy unless it can be shown to be reasonable. As the government restated in a 2026 working paper on non-compete clauses, any such clause is unenforceable unless the party relying on it can demonstrate that it is reasonable.
When is a restraint reasonable?
A restriction will only be enforced if it passes a reasonableness test that has three parts:
- It protects a legitimate interest, such as confidential information, the integrity of a competition or a genuine investment, rather than simply shutting out competition.
- It goes no further than necessary, which means it is reasonable in how long it lasts, the geographical area it covers and the activities it restricts.
- It is not contrary to the public interest, which in sport includes an athlete’s right to earn a living during what is often a short career.
The wider and longer the restriction, the harder it is to justify. Courts will not rewrite an unreasonable clause to rescue it, though they can sometimes sever an offending part if what is left still makes sense on its own. It is the same instinct that leads courts to strike down penalty clauses that go beyond genuine compensation.
Why sport raises the issue so often
The doctrine applies to sport because a paid athlete is treated as engaged in trade, a point established decades ago and still central today. But sport has features that make these clauses especially common. Governing bodies set rules that bind everyone in the sport, competitions are thought to need a degree of competitive balance, clubs invest heavily in developing and signing players, and image rights and sponsorship deals create valuable exclusivity.
That tension is the heart of the problem. A governing body or club may have a genuine, legitimate interest in some restriction, but the athlete on the other side has only a limited number of years to earn from their ability. The courts weigh the two against each other.
What the landmark cases show
Two cases shaped how the doctrine applies to sport in England and Wales.
In Eastham v Newcastle United (1964), the old retain and transfer system in football allowed a club to hold on to a player even after his contract had ended. The court held that the retain element was an unreasonable restraint of trade, and confirmed that someone paid to play sport is engaged in trade and so protected by the doctrine.
In Greig v Insole (1978), when players signed up for Kerry Packer’s World Series Cricket, the cricket authorities tried to ban them from Test and county cricket. The court held that the retrospective bans were an unreasonable restraint of trade, with the harm to the players and to the public outweighing the authorities’ interests.
The lesson from both is the same. Even entrenched, long-established sporting rules can be struck down if they reach further than is genuinely necessary.
Where it comes up today
The same principles run through many modern sporting arrangements:
- Transfer systems and release clauses, which control when, how and for how much a player can move between clubs.
- Salary caps, which limit what clubs can pay their players and have been challenged as restraints of trade in more than one sport.
- Post-contract restrictions on coaches, executives and backroom staff joining rivals, which have to be reasonable in the same way as any non-compete.
- Agent and image-rights arrangements that tie an athlete to one party, where the exclusivity has to be justified to be enforceable.
These remain live issues precisely because the commercial stakes are so high, and the doctrine gives a route to challenge rules and clauses that overreach. We look at related issues in our guide to athlete sponsorship contracts, where post-termination restrictions raise the same questions.
What it means for clubs, athletes and governing bodies
For clubs and governing bodies, a restriction is only worth having if it is enforceable. Drafting to a genuine, legitimate interest and keeping the duration, scope and geography no wider than necessary is what gives a clause the best chance of holding up. An overbroad clause risks being struck down entirely, leaving no protection at all.
For athletes, coaches and staff, a clause that looks binding may not be. If a restriction is preventing you from working and looks disproportionate, it is worth taking advice before assuming you are stuck with it. Disputes of this kind are often resolved through negotiation or arbitration, which is common in sport, or, where matters are urgent, through an interim injunction.
Speak to a sports law solicitor about a restraint of trade clause
Whether you are a club protecting an investment, a governing body defending its rules or an athlete or coach facing a restriction that seems to go too far, the enforceability of a restraint of trade clause turns on the detail. Getting it wrong can mean an unenforceable clause or a costly dispute.
At Osbourne Pinner, our sports law dispute solicitors advise athletes, clubs, agents and governing bodies on drafting, relying on and challenging restraint of trade and related clauses, and on resolving the disputes that arise from them through negotiation, arbitration or the courts.
Please note that this article is for informational purposes only and does not constitute legal advice. We always recommend speaking to a qualified solicitor for advice tailored to your specific circumstances.
We offer a free 30-minute consultation to discuss your situation. You can speak with us via video call or visit our offices in Harrow, Canary Wharf, Piccadilly Circus or Manchester. To arrange your consultation, call 0203 983 5080, email [email protected] or complete the form below.
