A college and an owner of a real estate related lectures business entered into a cooperation agreement for the provision of real estate courses signed by both the college and its two shareholders. The agreement included a prohibition on the college to engage in any field that competes with the other party for four years in the event of termination of the agreement and another clause stating that if the college uses lecturers or professional materials after the termination it is to pay a commission. When the agreement was terminated by the college, but it continued to teach the field, a lawsuit was filed against both college and its shareholders.
The Court held that when there are two contradictory clauses in an agreement, they must be construed in such a way as to prevent the contradiction, and therefore the college may use the materials, but it must pay the commission. Because the shareholders were signatories to the agreement with the college they are personally liable.
Published in Afik News 249 31.01.2018