Impact | Business Risk Management Blog

The case arises from circumstances in which Rico Industries, Inc. v. TLC Group, Inc., a recent decision by the Illinois appellate court, illustrates the adage pennywise, dollar foolish. A company negotiated an agreement to serve as the exclusive sales representative on behalf of another company. The terms of the agreement that was negotiated were documented by a short contract drafted by the owners of the two businesses without the assistance of counsel. The contract was not for any specific duration and provided that the contract could only be terminated in a writing signed by both parties. The two companies worked together under the contract for a number of years. But when one company sought to terminate the contract, it was unable to obtain the other’s written consent. The company seeking to terminate the exclusive relationship sought and obtained a judicial finding that the termination provision, as drafted, was defective and that the contract was terminable at will.