Module 2 · Chapter 5

Deadlock

When two owners can each say no, a company can get stuck. The deadlock clause decides what happens next: deadlines for talking, then a buy-sell notice, then winding up.

≈ 11 min read 8-question test

In this chapter

  • What counts as a deadlock, and how to count the days
  • The steps that follow a deadlock, each with its own deadline
  • Why a buy-sell notice can settle a dispute without being served

5.1Deadlock in one paragraph

Your client, A&W, holds 35% of the company. Even so, it can stop any reserved matter, because each one needs written consent from both owners (Chapter 4). Ferris, with 55%, has the same power.

On the board a tied vote fails, because the chair has no casting vote (Chapter 3). So each owner can block the company, and neither can move it alone. That is a deadlock.

Key point

The deadlock clause does not prevent a deadlock. It makes sure a deadlock ends. Each step has a deadline, and a missed deadline can cost your client the argument.

Also in this chapter

  1. What counts as a Deadlock Event
  2. How the Avonmouth plan became a deadlock
  3. A notice, then two rounds of talking, each with a deadline
  4. The buy-sell notice: a last step both sides fear
  5. Winding up, the step behind the last step
  6. Why the notice worked without being served
  7. Turning the settlement into consents
  8. Your job

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