Voluntary restriction agreements
Introduction
Voluntary restrictions agreements are entered into when two willing parties agree to limit their rights in a binding contract agreement. It allows them to set reasonable boundaries to conduct their activities in and subject to both of their interests and preferences. This agreement outlines the terms and conditions of the restrictions and the manner in which they should be enforced.
Definition
A voluntary restriction agreement, sometimes called an agreement to restrict or limit, is a contract between two parties that states that the one party agrees to restrict its own rights by either not exercising them, or exercising them only to certain extent, in exchange for the other party’s promise to do something specified by the agreement. The restrictions are generally related to property rights, but may include other things such as the parties’ financial activities, rights of ownership, or other matters.
Meaning
A Voluntary Restriction Agreement is a binding contract between two parties that identify the permissible activities of each party and seeks to limit the extent to which each party may exercise or claim its rights or interests. The purpose of the agreement is to protect and define the respective rights and interests of the parties and to create a degree of assurance that those interests will be respected.
Benefits
The main benefit of a voluntary restriction agreement is that it allows the parties to control their own activities, as well as the activities of each other, resulting in a more equitable and certain set of expectations for both. This agreement not only protects the parties from potential risks and disputes between them, but also allows them to come to an agreement that reasonably limits the activities of both parties and defines the manner in which they should proceed when they engage in those activities.
Conclusion
Voluntary restriction agreements are an important part of the legal framework and are used when two willing parties wish to limit their rights to conduct certain activities in a binding contract agreement. They are beneficial to both parties as it sets out clear and specific rights and expectations of both while reasonably protecting their interests.
