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Contract Law: When Can A Contract Be Legally Terminated?

Contracts are entered into for a variety of reasons: starting a new job, leasing a new home, promising the exchange of goods and services, and so on. But what happens when someone is ready to end, or terminate, a contract? Who has legal grounds, and when is a contract considered “officially” terminated?

At Patriots Law Group, we know and understand that contract disputes can be messy and unpleasant for all affected parties. This is especially true for members of the military community, who can be highly vulnerable to unfair contract disputes. If you or a loved one are involved in a contract dispute, our team is here to help you navigate the situation and reach the best resolution possible.

There are certain circumstances in which one or both parties have grounds for termination. These can include the standard grounds you would expect when a contract is considered “finished,” or when an employee gives notice at a job. They can also include more complicated contract disputes, like breach of contract or rescission based on fraud, misrepresentation, or outside influence.

Generally, a party has grounds to terminate a contract when:

  • The terms of the contract have been completed. This is one of the most common reasons a contract is terminated, typically for things like service agreements. For example, if you signed a contract with a vendor to supply the sound equipment for a concert, and the concert went off without a hitch and is now over, the terms of the contract have been met on both sides – the vendor provided their services, and you paid them accordingly. A contract like this is considered “completed” and does not typically require legal termination.
  • The original contract contains a break clause, or a prior agreement for grounds for termination. This is a standard part of most employment contracts: when someone starts a new job, their contract contains instructions for what to do if they decide to leave that job. Typically, this language could include something like “give at least two weeks’ notice” or “terms of contract will end after three months.” In these cases, so long as the terminating party meets the grounds laid out in the contract, it is perfectly legal to terminate the agreement.
  • The contract has been breached. A breach of contract occurs when one party violates the terms of the contract. This could include issues like nonpayment, faulty product, exceptionally late delivery of goods, or other considerations. Every contract dispute is going to be unique to the circumstances of the contract – this is why, in breach of contract cases, it’s critical to have an experienced attorney on your side to help you determine your rights and to reach an appropriate resolution.
  • The contract is void (or voidable). There are a number of reasons why a contract could be void from the start – for example, one party could be too young to enter into the agreement, someone could have lied about their side of the terms, someone may have been unduly pressured into signing, or not have the mental capacity to understand the terms of the contract. In cases where the contract was void when it was signed, the contract can be terminated (another word for this is “rescinded”). Under other circumstances, the law may view the contract as voidable and therefore allow recession of the contract.

Are you part of an unfair contract dispute based on unclear terms, breach of contract, the need for rescission, or other complications? We’re here to help. Give us a call at (301) 952-9000 to learn more about what we can do for you and your family.

DISCLAIMER:  The information above is for general informational purposes only and is not intended to serve as legal advice for any particular case or situation.  No attorney-client relationship is intended or created by this information.  Each individual situation is different, and therefore, a formal in-person consultation is necessary before any advice or information can be relied upon as appropriate and accurate for a particular case. Please call Patriots Law Group at 301-952-9000 to set up a consultation if you wish to obtain specific legal advice concerning your situation.