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Ben Jones
Ben Jones, UK Lawyer
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Can a management company terminate a contract if they are in

Resolved Question:

Can a management company terminate a contract if they are in breach of contract?
Submitted: 3 years ago.
Category: Law
Expert:  Ben Jones replied 3 years ago.

Ben Jones :

Hello, my name is XXXXX XXXXX it is my pleasure to assist you with your question today. Who will be in breach of contract - the management company?

Customer:

Yes the management company are in breach, can they terminate the contract when they are in breach?

Ben Jones :

what is the breach and what does the agreement say about their ability to terminate?

Customer:

It is an artist management contract and the management company are 3 months in arears for finacial reporting and havent set up a client associate account to manage all transactions. the termination wording is fairly standard taking in Bankruptcy, criminal offences etc etc none of which apply on our side as all terms of the contract have been adhered to.

Ben Jones :

but is there a specific notice period they could give to terminate the contract?

Customer:

either party shall be entitled to terminate the terms of this agreement on serving written notice if either party has commited a material breach of this agreement and has not remedied that breach within 60 days of receiving notice

Ben Jones :

have they followed this clause?

Customer:

Not as yet

Ben Jones :

Generally, such clause would allow one party to terminate an agreement, if the other party has acted in breach of contract and has not taken any steps to try and remedy the situation within the specified time period. It would not usually allow one party to act in breach, then rely on this clause to terminate the contract, although at first sight the use of the term ‘either party can cancel in the event of a breach by either party’ does make it look like they could. However, if this was to go to court, it is unlikely that they would agree a party could rely on its own breach to then go ahead and use the termination clause like this one to cancel the agreement. It would mean that by cancelling the agreement without following any specific and clear clause allowing them to do so, that party would be committing a further breach of contract.


 

Customer:

Thanks, XXXXX XXXXX helpful and what I thought but its always sensible to check.

Ben Jones :

you are most welcome, glad it has clarified things for you

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