A party to a share allotment agreement terminated such because of the fact that after the allotment he had no control over the board of directors.
The Court held that a material breach entitles the non-defaulting to terminate the agreement by delivering a termination notice without having to provide a prior notice so that the breaching party may remedy its breach as long as such termination notice was duly given. A party to an agreement is not entitled to rely in termination of the agreement on facts that were already known to it at the time of execution of the agreement.
In this case, it was already known to the shareholder upon execution of the agreement that after the execution he will not have the ability to control the decisions of the board of director in order to prevent certain transactions of the Company. Thus, he did not have a legal right to terminate the agreement under such grounds, especially when this was not a material breach that justifies termination without opportunity to the other party to remedy the breach.