This practice note provides an overview of Section 1 of the Sherman Act (Section 1), which addresses agreements that harm competition. Section 1 prohibits "[e]very contract, combination . . . or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations." 15 U.S.C. ยง 1. Courts do not read Section 1 literally, however, because to do so would theoretically ban all contracts and stifle commercial activity. Instead, courts interpret Section 1 to only prohibit unreasonable restraints of trade. This practice note discusses the framework used to evaluate liability under Section 1: whether there is a contract, combination, or conspiracy (i.e., concerted activity); whether a restraint is unreasonable; and whether a restraint affects interstate commerce or foreign trade. This note also examines two categories of restraints that can trigger liability under Section 1: horizontal (between competitors) and vertical agreements (between parties at different levels ...