rule of reason

rule of reason
rule of reason: a standard used in restraint of trade actions that requires the plaintiff to show and the factfinder to find that under all the circumstances the practice in question unreasonably restricts competition in the relevant market compare per se rule 2
◇ The rule of reason does not apply to per se violations of the Sherman Antitrust Act.

Merriam-Webster’s Dictionary of Law. . 1996.

rule of reason
A type of antitrust analysis used to determine the legality of agreements (written or oral) between competitors. 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.
See also per se rule.

Practical Law Dictionary. Glossary of UK, US and international legal terms. . 2010.

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