The Importance of Reasonableness in Contract Termination in the Dominican Republic Law.

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The Importance of Reasonableness in Contract Termination in the Dominican Republic Law.

In a recent ruling issued by the First Chamber of the Supreme Court of Justice, a topic of relevance in the contractual field was addressed: unilateral termination and the duty to provide reasonable notice. The case in question involved two companies; the first decided to unilaterally terminate its contractual relationship, providing a statement deemed insufficient by the second.

The crux of the conflict lay in interpreting the contractual clause that allowed a company to terminate the contract “at any time” but which, according to the court, should do so reasonably and under good faith and commercial practices. The court determined that a notice of just one week was unreasonable, given the magnitude and duration of the operations between the parties.

On the contrary, it was established that 7 or 8 days did not constitute a reasonable notice period before terminating a contract. Instead, it was determined that a reasonable period in commercial operations of the type judged should range between a minimum of 30 days and a maximum of 180 days unless there is a particular circumstance, based on article 1736 of the Civil Code, which establishes a prudent period for the vacating of a commercial establishment.

This ruling highlights the importance of reasonableness in contractual decisions, especially regarding unilateral terminations. Although contractual freedom and autonomy of will are fundamental principles in our legal system, they must be exercised responsibly and moderately. More is needed to strictly adhere to what is written in a contract: it is essential to consider the actual and potential impact of decisions on the parties involved.
The court also emphasized that, in the absence of specific regulation on the reasonable period for contractual termination, it is up to the judges to decide this matter. This ruling, therefore, not only resolves a conflict between two companies but also sets an important precedent on how contractual clauses should be interpreted and applied in the future.

In conclusion, the Supreme Court of Justice ruling reminds us that, beyond the letters of a contract, it is essential to act with reasonableness, fairness, and good faith. Contractual decisions should not be taken lightly, and the implications and consequences for all parties involved should always be considered.

Source: Ruling no. SCJ-PS-22-2693 of September 14, 2022, issued by the First Chamber of the Supreme Court of Justice.

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