Overview
- After Danan sent Lehavot a letter with allegations regarding violations of the agreement (M/133; see above), Lehavot sent Danan a letter dated July 20, 2017, entitled: "Termination and Termination of Services and Distribution Agreement", in which it announced its decision that the agreement "will be cancelled within 180 days from the date of our letter, in accordance with clause 8.2 of the agreement", and subject to the accompanying obligations (M/114; Agreement Termination Notice or Termination Message).
At the beginning of that letter , Lehavot also confirmed the receipt of the letter of the counsel in question (M/133) and categorically rejected the arguments raised therein. It was written that these were baseless allegations raised for the first time, "at a time that raises questions and raises great doubt regarding Danan's good faith."
- Danan responded to the notice of termination of the agreement in a letter by Counsel whose date is unclear (M/134 and M/142)[5]. The response stated, among other things, that the termination notice of the agreement originated in Danan's attempt to hold work meetings in order to get the agreement back on track, that the notice entailed expenses and damages, and that it was appropriate Shalhavot will carefully consider its steps before sending "such a dramatic announcement". The notice of termination of the agreement was described as an impulsive response that would incur costs, and the counsel again suggested that Lehavot hold a meeting and put the agreement back on track.
- At the same time, Danan began summoning some of its employees to a hearing in their case, summons reminiscent of Lehavot's announcement of the termination of the agreement (M/126). According to Danan, this move was intended to reduce its damages against the background of the agreement reaching its conclusion, even though it hoped that Lehavot would retract its announcement the termination and that the dismissal of the employees will be superfluous (paragraph 28 of the amended statement of claim; paragraph 21 of the present summaries).
- On September 17, 2017, Lahavot, through its attorneys at the time, sent a "notice of immediate cancellation of a services and distribution agreement" (M/115; Immediate cancellation notice). According to what is alleged in this letter, since the termination of the agreement, Danan has been unlawfully disavowing statements and undertakings and has substantially and fundamentally violated the agreement. This is partly because in practice, it was written, Danan closed the department that provided Lehavot with the services and terminated the employment of many of its employees, which significantly harmed and harmed performance, and because Danan conducts itself vis-à-vis customers in a manner that pushes them into the arms of Lehavot's competitors, such as its announcement of an increase in the prices of products in a manner that significantly exceeds market prices. It was noted that beyond Danan's liability for any damage resulting from its conduct, in accordance with the provisions of the agreement, Lehavot is entitled in this state of affairs, to announce the immediate cancellation of the agreement in accordance with clause 8.3 thereof, and it does so.
- So far an overview; Now to the arguments that have been raised regarding these moves.
Agreement Termination Notice (July 2017)
- The notice sent by Lehavot in July 2017 was based on clause 8.2 of the agreement, which states:
"[Lehavot] shall be entitled, at any time, at its absolute discretion and for any reason whatsoever, to notify [Danan] with 180 days' advance notice of the termination of this Agreement, without [Lehavot] being obliged to interpret or explain the grounds for termination as aforesaid, and [Danan] shall not hereby waive any claim and/or financial or other demand against [Lehavot] in connection with the termination of its engagement with [e] under this Agreement as aforesaid and/or in respect of all arising From this."