Goldsoll v Goldman [1915] 1 Ch 292
Covenant restricting the sale of imitation jewellery subject to doctrine of severability
Facts
The plaintiff and the defendant carried out similar business as dealers of imitation jewellery. The defendant sold his business to the plaintiff and covenanted that, for two years, he would not: “…be engaged concerned or interested in or render services (gratuitously or otherwise) to the business of a vendor of or dealer in real or imitation jewellery in the county of London or any part of the United Kingdom of Great Britain and Ireland and the Isle of Man or in France, the United States, Russia, or Spain, or within twenty-five miles of Potsdamerstrasse, Berlin, or St. Stefans Kirche, Vienna.”
Issues
The plaintiff sought an injunction against the defendant for an alleged breach of this covenant. At first instance, Neville J held that the covenant was not too wide in area but the part referring to the UK or the Isle of Man was severable from the rest. Furthermore, the covenant was not too wide because it extended to real jewellery, though the plaintiffs’ business was chiefly if not entirely confined to imitation jewellery
Decision/Outcome
The Court of Appeal upheld the decision of Neville J. The covenant was unnecessarily broad in so far as it intended to cover foreign countries. Neville J was correct to limit the injunction in area so that it only extended to the UK and the Isle of Man. Furthermore, the doctrine of severability was applicable to the part of the covenant regarding the scope of the defendant’s business. The covenant must be limited to what is reasonable necessary for the protection of the plaintiff’s business. Therefore, the covenant was only good to the extent that it restrained the defendant from carrying on business in imitation jewellery.
Updated 19 March 2026
This article accurately states the facts, issues, and outcome of Goldsoll v Goldman [1915] 1 Ch 292. The case remains good law and continues to be cited as a leading authority on the severance of unreasonably wide restrictive covenants in restraint of trade, particularly in the context of business sale agreements. The principles regarding severability applied in this case are consistent with the approach confirmed in later authorities, including Attwood v Lamont [1920] 3 KB 571 and Beckett Investment Management Group Ltd v Hall [2007] EWCA Civ 613. There have been no statutory changes that displace the common law doctrine of severance as described. Readers should note that the modern courts apply the so-called “blue pencil” test alongside the requirement that severance must not materially alter the character of the contract; this nuance is not fully addressed in the article but does not contradict it. The article remains broadly accurate for the purposes for which it is intended.
