Q&As

If a clause in a contract gives an immediate right to terminate for material breach and is silent as to the effect of a dispute resolution clause in the same contract on that right to terminate (although other clauses in the contract are expressed to be subject to the dispute resolution clause), does the party seeking to terminate have to go through the dispute resolution process before they terminate?

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Produced in partnership with Tim Herbert of Ignition Law
Published on LexisPSL on 25/09/2019

The following Commercial Q&A produced in partnership with Tim Herbert of Ignition Law provides comprehensive and up to date legal information covering:

  • If a clause in a contract gives an immediate right to terminate for material breach and is silent as to the effect of a dispute resolution clause in the same contract on that right to terminate (although other clauses in the contract are expressed to be subject to the dispute resolution clause), does the party seeking to terminate have to go through the dispute resolution process before they terminate?

The determination of the issue will always depend on the exact terms of the dispute resolution clause utilised in the contract. It has been assumed that a standard multi-tier clause has been used.

The distinction here is between the right to terminate and a disputed termination.

If a party to the contract (Party A) considers that there has been a material breach of that contract by the other party (Party B), then, assuming that the contract allows for termination for material breach, Party A will consider it ha

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