In a restraint clause, goodwill is the reason a restraint is allowed to exist at all: the value of the customer relationships, brand, and reputation the buyer is actually paying for, beyond the value of the physical and identifiable assets.
Technically, Australian courts and section 51(2)(e) of the Competition and Consumer Act 2010 (Cth) recognise protecting acquired goodwill as a legitimate interest that can justify a restraint in a sale of business, and preserve the validity of sale-of-business non-competes drafted solely for that purpose.
The word “solely” matters. A restraint drafted to protect something broader than the goodwill actually acquired, such as the buyer’s general competitive position or future expansion plans, falls outside the legitimate interest the law actually protects, whatever the restraint clause claims to be doing.
This exception has proven durable. Federal reforms aimed at employment-related non-competes, proposed to take effect from 2027, expressly preserve the sale-of-business goodwill exception, so it is not something likely to disappear from underneath a completed transaction.
What you as a seller should push back on: a restraint that reaches beyond the goodwill of the specific business being sold into the buyer’s broader group or future ventures, since a restraint drawn wider than the goodwill it is meant to protect is exactly the kind a court can find unenforceable.