Jiggly1984
Junior Member
What is the name of your state? Missouri.
Okay, this is kind of a complex issue, so please bear with me... I live in Missouri, but the other party to the contract is based in Minnesota.
I had a ten-year licensing agreement with a company that, in effect, allowed me to license to the company a product I developed. I would then be paid a percentage of gross proceeds from the sale of the product, or a minimum of $25,000 a year (starting in the third contract year.)
However, in the licensing contract, there was an "escape route," in which, if they decided the product wasn't going to be profiatble for them, they could terminate the contract by giving 30 days written notice of such termination within the first 12 months of the contract's execution.
Here's where things get tricky. The contract was executed on April 25, 2005, meaning their notice to terminate must come no later than thirty days before April 25, 2006.
Of course, they cancelled. I received the notice on March 27, 2006 (less than 30 days from Apr. 25.) However, they postmarked the notice March 20, 2006. So, here is the crux of my issue, and my question:
In our contract, there is a section that says, "All notices...shall be deemed to have been duly given and delivered... ten days after posting..." So, if my timeline is correct, and they sent it March 20th, it is considered received March 30th. Since that places the date of termination thirty days from March 30th, it is past the 12-month period during which they are allowed to cancel (April 25, 2005 - April 25, 2006).
While I understand that late notification of any sort is generally considered an immaterial breach, as it is usually irrelevant to the sufficient performance of the contract, my question is whether it could be argued this late notification is a material breach, as it involves the termination of the contract, and therefore it directly involves the performance of the agreement.
Long, drawn out, and confusing. Hope you all understood it, and can offer some insight to this. I also need to know what my course of action should be if it is, in fact, a material breach. I figure I will send a certified letter offering them the following options: continuing with the contract, uninterrupted and in full effect; or, $20,000 in exchange for my agreement not to arbitrate or litigage (10% of the amount of damages);or, let them do nothing, and I take them to arbitration for $200,000 ($25,000 a year for the remaining 8 years of the contract).
Any help would be excellent!
thanks!
Okay, this is kind of a complex issue, so please bear with me... I live in Missouri, but the other party to the contract is based in Minnesota.
I had a ten-year licensing agreement with a company that, in effect, allowed me to license to the company a product I developed. I would then be paid a percentage of gross proceeds from the sale of the product, or a minimum of $25,000 a year (starting in the third contract year.)
However, in the licensing contract, there was an "escape route," in which, if they decided the product wasn't going to be profiatble for them, they could terminate the contract by giving 30 days written notice of such termination within the first 12 months of the contract's execution.
Here's where things get tricky. The contract was executed on April 25, 2005, meaning their notice to terminate must come no later than thirty days before April 25, 2006.
Of course, they cancelled. I received the notice on March 27, 2006 (less than 30 days from Apr. 25.) However, they postmarked the notice March 20, 2006. So, here is the crux of my issue, and my question:
In our contract, there is a section that says, "All notices...shall be deemed to have been duly given and delivered... ten days after posting..." So, if my timeline is correct, and they sent it March 20th, it is considered received March 30th. Since that places the date of termination thirty days from March 30th, it is past the 12-month period during which they are allowed to cancel (April 25, 2005 - April 25, 2006).
While I understand that late notification of any sort is generally considered an immaterial breach, as it is usually irrelevant to the sufficient performance of the contract, my question is whether it could be argued this late notification is a material breach, as it involves the termination of the contract, and therefore it directly involves the performance of the agreement.
Long, drawn out, and confusing. Hope you all understood it, and can offer some insight to this. I also need to know what my course of action should be if it is, in fact, a material breach. I figure I will send a certified letter offering them the following options: continuing with the contract, uninterrupted and in full effect; or, $20,000 in exchange for my agreement not to arbitrate or litigage (10% of the amount of damages);or, let them do nothing, and I take them to arbitration for $200,000 ($25,000 a year for the remaining 8 years of the contract).
Any help would be excellent!
thanks!