Termination of a Commercial Agreement
March 19, 2009This case concerned an application for an injunction to prevent the Defendant from terminating a maintenance agreement at will and on three months notice.
The maintenance agreement in question provided annual fees of some €150,000 per annum and the Plaintiff submitted that the agreement could only be terminated for fault and if the agreement was in fact terminated it would go out of business.
The Judge in the case submitted that on the facts there was a fair case for Trial as there was an arguable case that the agreement was not clear as to whether the agreement could in fact be terminated at will - note that here damages could be relatively easily assessed and could also be substantial due to the yearly value of the agreement.
This case shows how important it to have a clearly drafted agreement in place that deals with termination of the relationship, otherwise either party can find themselves locked into an agreement which can quickly become the subject of a time-consuming and very expensive Court case.
[Wesumat (Ireland) Limited (Plaintiff) v Topaz Energy Limited (Defendant) - High Court - reported March 2009].
