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What do you know about getting out of contracts?

by | Jun 11, 2022 | Business Law

Rather than dealing with a person or company violating an agreement, you could be the party that cannot meet a contract’s terms. How do you get out of an agreement without facing a lawsuit?

Chron offers tips for saving face when you must extricate yourself from a business contract. Learn how to protect your professional reputation and (hopefully) avoid legal action.

Breach from another party

Perhaps you cannot fulfill your end of the agreement because another party failed to uphold its responsibilities. If so, you have the legal right to get out of the contract. Look over the agreement carefully to ensure the other individual or entity violated its terms, and prepare to offer proof. Depending on whether you struck an agreement based on the other party’s misrepresented facts or fraud, you may not need to worry about a lawsuit for ending the contract.

Termination clause

Your contract could include a termination clause. If it does, read over the language to understand conditions that permit you and the other party to get out of the agreement without facing consequences. You may have to give notice before putting the brakes on the contract, or you may need to pay a penalty or satisfy specific responsibilities.

Unable to perform responsibilities

Perhaps a life event or unexpected circumstances left you unable to meet your contracted obligations. This is an “impossibility of performance,” which means an uncontrollable situation stripped you of your ability to perform your responsibilities. Examples of such a situation and events include the death or incapacity of a vital team member, destruction of essential project equipment and a natural disaster.

Hopefully, you protect your business and professional reputation after ending a contract. Knowing how to navigate the unexpected may help ease your anxieties.