Broken heart joined with safety pin

So, you’ve either got a written business contract which is silent on how it can be ended or no contract at all.  The other party has not done anything wrong, you have just drifted apart.

That means you can end it any time, right?  Wrong. 

You may not be aware, but if the other party has standard Terms and Conditions which apply to their business, then these may apply to your agreement with them.  They may have clauses which deal with how the contract can be ended.

Otherwise, even if there is nothing in writing, there will be an agreement between you and the other party.  The terms of that agreement can be oral, implied by conduct or by law.

That means that you will not simply be able to walk away after giving them a “Dear John” letter.  Usually, you have to give the other party reasonable notice of your intention to walk away.  What is reasonable depends on a number of things such as:

  • the type of contract or agreement
  • the investment that you (or the other party) have made in the agreement, for example, the purchase of bespoke parts or machinery
  • the intention of the parties when the agreement was entered into as to its length and also the time that might be needed to replace your business.

Basically, then, careful thought has to be given to decisions to terminate where the other party has done nothing wrong.  If you get it wrong, and break up too early or without giving the other party any notice, then you might find that it isn’t so easy to just walk away.

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This blog is intended only as a synopsis of certain recent developments. If any matter referred to in this blog is sought to be relied upon, further advice should be obtained.