Contract Drafting and Negotiation for Entrepreneurs and Business Professionals by Paul A. Swegle

Author:Paul A. Swegle
Language: eng
Format: mobi, epub
ISBN: 9780692138304
Publisher: Business Law Seminar Group, LLC
Published: 2018-09-14T21:00:00+00:00

The last bullet above alludes to the important idea that post termination rights or obligations can and should vary depending on whether the termination is due to the natural lapsing of an agreement or a party’s failure to properly perform.

Termination by Itself is a Weak Remedy

Termination for breach often involves hardships for the party exercising the right. As will be discussed in the next section on Remedies for Breach, a party forced to cut its losses because of the other party’s non-performance will almost certainly look back at the agreement hoping to find some form of damages, fee clawbacks or other make-whole clauses. Often, that search for relief will be disappointing. Many commercial agreements are woefully silent regarding compensation for another party’s poor performance.

As a general rule, sellers of goods or services shy away from exposure to liabilities of any kind for poor performance beyond basic simple repair, replacement, refund, or re-do obligations. As discussed next under Remedies for Breach, captions by that name or otherwise mentioning “Remedies” or “Damages” are virtually non-existent in commercial agreements. As discussed below under Limitations of Liabilities, most agreements in fact specifically disclaim the kinds of financial harms that are most likely to arise due to a party’s poor performance – lost profits, missed market opportunities, and wasted resources.

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