Drafting Drag along Triggers in International Shareholders Agreements
Drafting cross-border drag-along triggers requires verifiable voting thresholds, explicit cash valuation floors, and deeded power-of-attorney execution clamp mechanics.
Injunctive Relief Waiver
Meaning
Contractual provision where a party agrees not to seek a court order to stop the other party from performing a specific action. An injunctive relief waiver is common in service agreements and licensing deals where the parties prefer to settle disputes through monetary payments rather than halting operations.
Equitable Restriction
The party giving the waiver admits that a breach of the contract can be adequately compensated with money. This prevents them from going to a judge to request an emergency injunction to block a product launch or a corporate merger while the legal dispute is still pending.
Damages Remedy
Legal action for a breach of contract is limited to the recovery of financial losses that can be proven in court. By removing the threat of an injunction, the waiver provides the other party with the certainty that they can continue their business activities without the risk of a sudden shutdown. This arrangement shifts the focus of any litigation toward the calculation of fair compensation for the harm caused by the breach.
The court evaluates the evidence of lost profits and costs to arrive at a final judgement. This reliance on monetary damages protects the operational continuity of the target company.
Breach Consequence
If a party tries to seek an injunction despite the waiver, the court will likely dismiss the request based on the signed agreement. The party who violated the waiver may also be liable for the legal fees and costs incurred by the other side.