Terminating a contract can be done by mutual agreement or through a termination clause with a clear notice provision. Breach of contract can also lead to termination, but legal action should be avoided until the breach is serious. Contracts can also be terminated due to illegality, unreasonable acts, or torts.
Termination of the contract occurs when one or both parties decide to terminate their contractual obligations. The easiest way to terminate a contract is for both parties to mutually agree that the contract is no longer necessary. If only one party wants to terminate the contract, it could be much more difficult. There are some steps, however, that a party can take before starting down the road to terminating the contract. Furthermore, there are several situations, such as illegality and inconceivable acts, which can make a contract unenforceable and, consequently, terminated.
Mutual termination is the simplest form of contract termination. It occurs when both parties decide that the terms of the contract no longer apply. For example, if one party contracts with another party to sell widgets for six months, after just three months, one party decides they no longer want to buy widgets and the other party decides they no longer want to sell widgets. The two parties can easily decide that the contract is terminated by mutual agreement. There won’t be a lawsuit or an agreement to terminate the contract, just simple paperwork proving that the contract was terminated by mutual agreement.
A termination clause with a clear and reasonable notice provision in a contract can also make termination of the contract quite easy. If the statement is unclear, such as if a termination clause states that one party has the right to withdraw from the contract for any reason at any time, the termination clause may not apply in some courts. We need a clear and reasonable notification provision. For example, if a provision states that one party must give two months’ notice before terminating the contract, then the termination clause is applicable. Consequently, either party may withdraw from the contract, upon notice to the other party. It is important to read the termination provision and follow it explicitly to avoid legal action.
In many cases, termination of the contract can occur if one party is in breach of contract. In other words, if one of the parties does not keep his part of the agreement, the contract can be terminated. If one party seeks to terminate the contract based on a breach, it can lead to legal action. Many times, the defaulting party does not agree that they have broken the terms of the contract and will fight in a courtroom to prove they have not broken. It is best to wait until the other party is in serious breach and examine how each party may have contributed to the breach before terminating the contract. Taking the other party to court too early can backfire, as courts can find the plaintiff in default and also liable for damages.
Other grounds for termination of the contract include the illegality and unreasonable acts of one of the parties. For example, if the contract was entered into with a party who is not old enough to form a legal and binding contract, the contract will be terminated. Also, if a party commits a tort to meet the terms of the contract, the contract can be terminated, especially if the tort was not a necessary part of the contract. Also, if a contract includes an unreasonable act in its terms, it can be terminated. For example, if the contract contains a clause stating that a landlord can never be held liable by his tenants, the contract may be terminated.
Protect your devices with Threat Protection by NordVPN
