Many of us enter legally binding contracts on a regular basis. Mostly, we are perfectly happy, however, what if you become unhappy and wish to terminate?
Many written contracts have express terms which govern termination and so such terms need to be checked first. Quite often, written contracts are not set out in one discrete document but can be set out in several, for example, in an email exchange, so make sure that you review all the relevant documentation and communications. Even where the contract is in writing, it is still worth checking with those that negotiated the contract to understand the reasons behind the termination provisions.
If the contract is not in writing, speak to the individuals who manage the relationship with the other contracting party so that you can understand the nature of what was agreed and how the contract is being performed by the parties. For example, has the relationship existed for several years, what are the parties’ obligations, is one party not performing its obligations properly, what happens to the other party’s business if you stop performing your obligations?
Even where there is no express agreed term (whether in writing or agreed orally) which applies to termination, the general law (often referred to as the common law) will often enable a party to end an agreement early.
Look out for the several minefields!
For example, many written contracts provide for a specific notice of termination which must be served in a particular way. Many also provide that a termination notice must be served by a specific date. Getting it wrong can mean the termination notice is not effective and/or puts the sender in breach of contract.
For more information, email email@example.com.