Cases

Termination without compensation

Termination of the contract of mandate in a manner stipulated in the contract – upon specified notice period – does not result in mandatary’s liability for damages in mandatary’s favor as a result of termination of the contract without giving important reason.

In one of the cases conducted by the Law Office, has emerged a complex legal issue: is a member of the management board bounded with the company by the contract on provision of services  who terminates the contract upon notice period stipulated in the agreement, without giving important reason of such action, liable for damage suffered by the company.

To the contract on provision of services apply the regulations of the civil code regarding contract of mandate, among other article 746 in accordance with which the mandatary is obliged to compensate the damage suffered by mandator in the event of terminating by mandatary the contract without giving important reason.

The Supreme Court in one of its decisions presented an opinion according to which if in the agreement was stipulated the opportunity to terminate the contract with the specified notice period, the parties waived its right to terminate the contract at any time. The reason of the termination of the contract it’s of no importance, the lack of important reason of termination does not result in mandatary’s liablity for damage suffered by the mandator. According to the Supreme Court in such a situation the contract is terminated in a manner stipulated therein.

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