Selling an activity of a company does not cancel obligations under existing agreements

November 7, 2018
The legal update was published in Afik News 271 05.12.2018

תא (חי') 13263-10-18, נ.ת.נ.ג.ב החזקות יעוץ וניהול בע"מ נ' מילוטל ירקות מוקפאים בע"מ, בית המשפט המחוזי בחיפה, 07.11.2018, כב' השופט גדעון גינת

A company entered into an agreement for the purchase of 1,500 tons of frozen vegetables from another company. After receiving approximately 900 tons, the entire activity was sold to a third party and it was no longer able to supply the rest of the goods.

The Court held that the seller and whoever sold him his activity cannot sell the goods to anyone else. The fact that the seller sold its activity cannot justify ignoring the existing agreement with the purchaser of the goods. Therefore, the purchaser of the goods is entitled to its goods and to claim compensation for damages caused to it.