36. Rights of outgoing partner to carry on competing business

(1) An outgoing partner may carry on a business competing with that of the firm and he may advertise such business, but, subject to contract to the contrary, he may not—

(a)   use the firm name,
(b)   represent himself as carrying on the business of the firm, or
(c)   solicit the custom of persons who were dealing with the firm before he ceased to be a partner.


(2) Agreements in restraint of trade—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 a specified local limits; and, notwithstanding anything contained in section 27 of the Indian Contract Act, 1872 (9 of 1872), such agreement shall be valid if the restrictions imposed are reasonable.