A contract can be terminated by court order, mutual decision, or completion of all terms. If all terms are completed, the agreement may be deemed terminated. If not, an agreement or legal action may be necessary. Courts get involved when at least one party violates the terms.
Termination of a contract occurs when the contract is legally completed. Either by court order, mutual decision, or completion of all terms, performance of a contract terminates all obligations and requirements imposed by the contract. There are many different ways a contract can be terminated, the most satisfactory usually being when all parties involved complete the contract as agreed.
Ideally, a contract has a duration defined by its terms. If a landscaper and homeowner enter into a contract, the ideal unloading will occur after the landscaper has performed the agreed upon services to the homeowner’s satisfaction, while the homeowner pays the landscaper the agreed amount for his services. If all terms are completed as outlined in the agreement, the agreement may be deemed terminated, ending any future liability of either party.
Unfortunately, dissolving a contract isn’t always that smooth. Whether voluntary or accidental, it sometimes becomes impossible or undesirable for at least one signatory to fulfill his or her responsibilities as dictated by the contract. In these cases, how performance of a contract is carried out will depend on the individual circumstances.
Other than meeting terms, the simplest way to get a contract fulfilled is often a process known as an agreement. This occurs when the parties involved change the terms of the contract to create a new agreement. If a person signs a contract for a 15-year loan, for example, and then decides the payments are too high, the contract could be amended to change the payment schedule to 20 years. If a contractor doesn’t build a home beyond specification, he can reach an agreement with the homeowner by accepting a reduced payment.
In some cases, where satisfaction or agreement cannot be achieved, termination of a contract may require legal action. In some cases, court-ordered discharge is required if the contract is rendered impossible by the death of one of the parties. Bankruptcy is another reason a court may choose to get involved in the fulfillment of a contract. A contract can also be terminated if an item in play, such as a famous painting involved in a contract, is destroyed and cannot be transferred.
Courts often get involved in fulfilling a contract when at least one party is believed to have violated the terms. If a homeowner, after signing a contract, decides he doesn’t like a contractor and refuses to pay him after a job is completed, the contractor can sue for breach of contract. In these matters, the jurisdiction of the court is to determine whether the contract is valid and lawful and to discharge liability through a court order.
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