How to Terminate a Contract
Use a termination clause., Argue the contract is impossible., Claim a frustration of purpose., Identify a failure of condition., Negotiate a termination., Claim breach of contract.
Step-by-Step Guide
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Step 1: Use a termination clause.
Many types of long-term and automatically renewing contracts have a termination clause.
This gives you the steps you need to take if you want to terminate the contract.
A common termination clause says that the person who wants out of the contract must notify the others involved of his intent to do so.
This must be in writing and within a certain number of days from when they want to end the contract or when it will be automatically renewed.
Termination clauses may include fees for early termination.
Be sure you are willing to pay the penalty before using the clause and terminating the contract., If you are unable to perform your obligations due to some impossibility, you may have a legal right to terminate the contract.
You cannot be unable to fulfill the contract because of circumstances you caused yourself.
It must be either the fault of the other person involved.
It can also be the result of an act of nature, such as a hurricane or tornado.
For example, if you agree to sell your boat tomorrow and tonight a hurricane comes and damages it beyond repair, the sale becomes impossible, and both parties can be excused from the contract. , Frustration of purpose occurs when the reason behind entering a contract goes away.
To be able to terminate a contract based on frustration of purpose, the purpose of the contract must be known by all parties involved.For example, if you sub-lease an apartment in order to participate in a large local event such as a parade, but the parade is cancelled, you may be able to terminate the sub-lease contract if the other party involved was aware that your purpose for the sub-lease was to participate in the parade. , If one party fails to fulfill his end of a contract, that lack of performance may allow the second party to terminate his end of a contract.For example, if someone was contracted to paint a wall, the other party was contracted to pay him for his service.
If the painter fails to uphold his part of the contract (painting the wall), then the other party can legally terminate his side of the contract (to pay for the service) because the painting is a condition of the payment. , If you know you want to terminate a contract, contact the other person involved in the contract.
Attempt to negotiate an end to the contract.
You and the others involved can cancel the contract by mutual agreement at any time.
You may want to offer some compromise by offering to pay some type of cancellation fee, returning funds received as a result of the contract, or offering to continue the contract for a few more months.
Be sure to put any new arrangement reached in writing and have both parties sign it. , If the person you are in the contract with knowingly fails to keep the terms of the contract, you may terminate your end of the contract.
The person who broke the contract has no right to complain that you ended the contract.
Since she breached the contract, they have no say in whether or not you terminate the contract. -
Step 2: Argue the contract is impossible.
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Step 3: Claim a frustration of purpose.
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Step 4: Identify a failure of condition.
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Step 5: Negotiate a termination.
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Step 6: Claim breach of contract.
Detailed Guide
Many types of long-term and automatically renewing contracts have a termination clause.
This gives you the steps you need to take if you want to terminate the contract.
A common termination clause says that the person who wants out of the contract must notify the others involved of his intent to do so.
This must be in writing and within a certain number of days from when they want to end the contract or when it will be automatically renewed.
Termination clauses may include fees for early termination.
Be sure you are willing to pay the penalty before using the clause and terminating the contract., If you are unable to perform your obligations due to some impossibility, you may have a legal right to terminate the contract.
You cannot be unable to fulfill the contract because of circumstances you caused yourself.
It must be either the fault of the other person involved.
It can also be the result of an act of nature, such as a hurricane or tornado.
For example, if you agree to sell your boat tomorrow and tonight a hurricane comes and damages it beyond repair, the sale becomes impossible, and both parties can be excused from the contract. , Frustration of purpose occurs when the reason behind entering a contract goes away.
To be able to terminate a contract based on frustration of purpose, the purpose of the contract must be known by all parties involved.For example, if you sub-lease an apartment in order to participate in a large local event such as a parade, but the parade is cancelled, you may be able to terminate the sub-lease contract if the other party involved was aware that your purpose for the sub-lease was to participate in the parade. , If one party fails to fulfill his end of a contract, that lack of performance may allow the second party to terminate his end of a contract.For example, if someone was contracted to paint a wall, the other party was contracted to pay him for his service.
If the painter fails to uphold his part of the contract (painting the wall), then the other party can legally terminate his side of the contract (to pay for the service) because the painting is a condition of the payment. , If you know you want to terminate a contract, contact the other person involved in the contract.
Attempt to negotiate an end to the contract.
You and the others involved can cancel the contract by mutual agreement at any time.
You may want to offer some compromise by offering to pay some type of cancellation fee, returning funds received as a result of the contract, or offering to continue the contract for a few more months.
Be sure to put any new arrangement reached in writing and have both parties sign it. , If the person you are in the contract with knowingly fails to keep the terms of the contract, you may terminate your end of the contract.
The person who broke the contract has no right to complain that you ended the contract.
Since she breached the contract, they have no say in whether or not you terminate the contract.
About the Author
Lori Gonzalez
A passionate writer with expertise in practical skills topics. Loves sharing practical knowledge.
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