Liability and Exclusivity Agreements

Questioner

Dear recipient, My company has an exclusivity agreement with a client, due to a number of stupid internal errors this agreement was violated. At the time we immediately contacted our client, to offer our apologies for this, and adjusted the internal processes so that this would never happen again. We have an email from our client in which he indicates in May 2012 that we had made mistakes in 2011, but then leaves it at that. Last week he nevertheless held us liable for his 'loss'. My question is, if someone indicates by email 6 months ago that he is dropping the matter, can he or she still hold us liable for loss, or is this too late (I have read something about the right to complain or something?). Thank you in advance for your response!

Lawyer

Dear questioner, It could well be that there is a waiver of rights here, since it has been expressly and unambiguously stated that no action will be taken. The question is, however, how exactly this is stated in the email and whether this email comes from a person who actually has the authority to represent the company. In any case, a period of 6 months is not sufficient to assume that the other party is 'too late'. Yours sincerely,

Questioner

Dear Mr. Wassink, Thank you very much for your response. The email is from the owner of the company. The literal text is: In the past, a weakness has arisen where I have been sidelined and have missed projects because of ........... I then left that behind in good consultation with you. This was my client's response.

Lawyer

Dear questioner, You can take the position that there is a waiver of rights or forfeiture of rights. Afterwards you still did business with each other in the correct manner, I assume? All in all, expectations were raised in you that the case was settled. However, practically it is best to enter into consultation with the other party to resolve the matter in good consultation, as you will still need to do business with each other more often. A legal battle will not contribute to this cooperation. Yours sincerely

Questioner

Dear Mr. Wassink, Thanks again for your response. I understand from your response that it is practical to enter into consultation, I do not know if we need that. My question is whether we are in a strong position because of the email that the owner sends in which he waives further steps?

Lawyer

If the matter has never been discussed again since that point and you have conducted business normally, then in my opinion you are 1-0 ahead. In a procedure, the other party will claim damages, in which you raise the aforementioned defense, with the e-mail as direct evidence and the other facts and circumstances. The other party will then have to provide counter-evidence, stating that he did not expressly and unreservedly waive his rights through the e-mail. Without knowing the rest of the correspondence, the sentence quoted by you is, in my opinion, only open to one interpretation. You will have to make a cost/benefit assessment yourself. A procedure ending victoriously with a negative financial result is often a real possibility. I wish you much success and wisdom.

Lawyer

Can you be held liable? Don’t worry too much? Why not? 1) the alleged damage must be the result of your fault. To prove this, quite a lot must be put on the table. In practice, this is often a difficult hurdle. 2) the email from which you infer that the party in question has indicated that they are going to leave it at that is not very clear to me, but if no other message follows, that reinforces your interpretation. Advice: don't bring it up again if the party in question doesn't bring it up. Time works in your favor in this case.

Questioner

Dear Mr. Creator, Thank you very much for your response. The client held us liable a little over a week ago, and the message in May was the last message regarding this case. The other party is not claiming the actual damages, but the penalty clause that we have included in the exclusivity contract. This penalty is E10,000 per violation, and E2,500 per day that the violation continues. The actual damages are however E12,500 max. Our own revenue model in this has been a small E500, no more. Do you see any advantages/disadvantages here with the knowledge you now have of the penalty clause?