Rule of Reason


Rule of Reason has dual meanings:

  1. (Economic) A principle for determining the legality of business practices. Illegality is determined by evidence concerning the country, competitors, and consumers.
  2. (Legislation) A standard applied to the Sherman Antitrust Act that interprets it to prohibit only “unreasonable restraints of trade” rather than every restraint of trade. The courts have not consistently defined the term “unreasonable.”[1]



  1. ^ American Marketing Association, AMA Dictionary.

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