Practical Law Glossary Item 4-383-7924 (Approx. 3 pages)
Glossary
Rule of Reason
A type of antitrust analysis used to determine the legality of agreements (written or oral) that may restrict competition. Under the rule of reason, courts examine both the positive and negative effects of an agreement before determining whether it violates antitrust laws. Courts consider several factors in making their determinations, such as the business purpose of the agreement, market power of the parties involved, competition within the relevant market, and other market circumstances.