It is common for contracts to contain termination provisions
that only allow for termination for a remediable breach if notice
of the breach is given and the breaching party is allowed time to
remedy it. For a party considering the application of such a
clause, an obvious question is: what breaches do the courts
consider capable of remedy? The High Court of England and Wales
recently considered this in Stobart Capital Ltd v Esken
Ltd1. While not making new law, the case is a good
reminder that the answer is maybe more than you think.
Background
The claimant, Stobart Capital Ltd (‘SCL'), was
founded by Andrew Tinkler, the former chief executive officer of
the defendant, Esken Ltd, formerly Stobart Group Ltd. SCL and Esken
entered into a management agreement, under which SCL was required
to (among other things) introduce and develop new business
opportunities for Esken. The agreement contained the following
termination provision: ‘This Agreement may be terminated
