Blackstone Medical, Inc. D/B/A Orthofix Spinal Implants v. Phoenix Surgicals, LLC
470 S.W.3d 636 | Texas Court of Appeals, 5th District (Dallas) | 2015
What This Case Means for Subcontractors
Orthofix, a medical device supplier, terminated its distribution agreement with Phoenix Surgicals and claimed the contract couldn't be enforced due to the statute of frauds. The Texas Court of Appeals upheld a jury verdict awarding Phoenix over $705,000 for wrongful termination and promissory estoppel. The court found that Orthofix had waived its exclusivity rights through prolonged silence and inaction, making the termination wrongful even though the original contract had issues.
Key Takeaways
- •Silence or inaction on enforcing contract terms can constitute a waiver—don't assume you can enforce strict contract language if you've ignored violations for a long time
- •Termination-for-convenience clauses may not protect you if you've waived exclusivity or other key provisions through your conduct or past practice
- •Document all contract disputes and enforcement actions in writing; prolonged silence about known breaches can cost you significantly in court
Waiver may be established by showing prolonged silence or inaction in asserting known right.
Frequently Asked Question
Can I terminate a subcontractor if I've been ignoring contract violations for months?
Not necessarily. Courts may find you've waived your right to enforce strict contract terms if you've stayed silent or inactive about known breaches for a prolonged period. Your past practice and inaction can prevent you from suddenly enforcing the contract, even if the original language gives you termination rights. Always document disputes in writing and act promptly on violations.
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