The sigh of this construction resulted in the applicant having to break the clause prohibiting them from enacting proceedings earlier in order to avoid the statute of limitations. This was patently absurd – the court does not intend to expose a contract as a party that violates its terms for the agreement to work. Coulson J. considered that the agreement was suspended, which gave the applicant time to initiate proceedings after the expiry of the suspensive period. If your organization is having difficulty fulfilling its contractual obligations, including paying or withdrawing services, a status quo agreement can provide some relief. Status quo agreements should not only be used as a means of delaying litigation, but should also be concluded in order to maintain trade relations. A company that is pressured by an aggressive bidder or activist investor believes that a status quo agreement is useful in weakening the unsolicited approach. The agreement gives the target entity greater control over the deal process by requiring the bidder or investor to buy or sell the company`s shares or launch proxy contests. The second scenario involves claims against third parties. Defendants must be careful before entering into status quo agreements with the applicants, without their knowledge of the claim, if they are entitled to a third party that cannot be invoked under the Civil Liability (Contribution) Act of 1978.
They may find themselves in an impossible situation if they are unable to convince the third party to enter into a no-return agreement, as happened in Nomura International Plc/Granada Group Ltd. It is an abuse to deprive an accused of a narrow defence by issuing a trial in which the application cannot be properly formulated and has no intention of advancing the complaint. Please contact the author`s lawyers or a member of the Woods Rogers Business and Corporate Practice to discuss whether a status quo agreement is appropriate for your business. In light of recent developments in the Treaty Interpretation Act, the Tribunal considered the appropriate approach to the setting of the recitals and their interaction with operational terms. If the recitals and operational provisions of an agreement are clear but inconsistent, operational provisions should in principle be preferred (Re Moon (1886) 17 Q.B.D. 275). However, the courts place greater emphasis on the actual context and the recitals are increasingly being examined to assist in contractual interpretation.
