What is an example of an unenforceable "restraint of trade"?

The correct answer highlights how certain agreements can be deemed unenforceable because they impose limitations that are considered harmful to public interests. A contract that restricts a business's ability to compete in a way that is detrimental to market dynamics or consumer choice can be categorized as a restraint of trade. This is particularly relevant when the agreement's enforcement would harm competition or restrict essential goods or services from being provided to the public.

In Texas, as in many jurisdictions, the law recognizes that the public has an interest in the free flow of trade and competition. Any provision that significantly impairs that free flow, particularly in a manner that limits the availability of products, services, or options to consumers, can be struck down as against public policy. This ensures that the market remains competitive and beneficial for consumers, fostering innovation and fair pricing.

The other options do not fit the criteria of an unenforceable restraint of trade as directly as this choice does. For example, a non-compete agreement might be enforceable if it is reasonable in duration and geographic scope. Similarly, an agreement preventing operation within a specified radius can also be legitimate if it protects legitimate business interests. Lastly, an arbitration clause typically does not restrain trade but rather governs dispute resolution, making it a separate