Plaintiff CD appointed defendant SST to be the exclusive reseller to certain customers of CD’s software development platform. CD sued SST for breach, and SST likewise filed counterclaims for breach of contract and fraudulent inducement. SST sought a preliminary injunction against CD, asking that the court prohibit CD from unilaterally terminating the reseller agreement.
SST asserted, among other things, that it would suffer irreparable harm from this termination, citing potential loss of solicited clients and reputational damage. CD argued, however, that these asserted harms could be remedied monetarily, and thus did not qualify as irreparable.
The court agreed with CD, finding SST’s arguments regarding reputational damage and loss of client relationships to be speculative and unsupported by concrete evidence. As such, these claims did not meet the stringent criteria for irreparable harm, which requires a clear, immediate threat of injury that monetary compensation could not redress.
Further undermining SST’s claim of irreparable harm was the notion that any potential financial losses due to CD’s actions, including the costs associated with resolving issues with target accounts or transitioning to alternative software solutions, were quantifiable and thus recoverable in monetary terms. The court noted that SST’s reluctance to make additional payments to CD for resolving software access issues did not constitute irreparable harm, as those could be recouped in resolution of the contract dispute. Moreover, the court pointed out that SST’s concerns about CD not restoring access post-payment were speculative and lacked evidentiary support, given the record showing ongoing negotiations and concrete offers from CD.
Citizen Developer, LLC v. System Soft Tech., Inc., 2024 WL 554140 (M.D. Penn. February 12, 2024)
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