There are many reasons why you want or need to terminate a contract. An agreement can in fact be concluded if certain conditions have changed since its conclusion. Some contracts can be canceled even if they were never legal in the first place. If you decide to terminate a contract, you should make sure that this will cause you as little damage as possible.
Steps
Method 1 of 3: Legally Terminate a Contract
Step 1. Use a termination clause
Many types of long-term and auto-renewing contracts have a termination clause. It explains the necessary steps to be implemented if you want to end the contract. Under a common termination clause, the person wishing to enter into the agreement must notify the other parties so that they become aware of his intentions. This must be done in writing and with a certain time notice with respect to the actual conclusion of the agreement or automatic renewal.
The termination clause may include penalties for terminating the contract early. Make sure you are willing to pay this fine before using the clause and ending the agreement
Step 2. Claim the inability to enforce the contract
If you are unable to honor your obligations due to a certain limitation, you may have the legal right to terminate the contract - however, you do not have the capacity in case of circumstances that you yourself have caused. The blame must fall on the other party involved or be attributed to a force majeure, such as a natural disaster.
For example, if you agreed to sell your boat by a certain date and an unexpected hurricane damages it irreparably the night before, it will become impossible to sell. As a result, both parties will be released from the contract
Step 3. Claim the cancellation of the underlying purpose of the contract
This situation arises when the reason that led to the conclusion of the agreement disappears. To be able to terminate a contract based on this ground, the purpose of the contract must be known to all contracting parties.
For example, you sublet an apartment for the purpose of attending a large local event such as a parade, but it is canceled. You may have the option to terminate the sublease agreement if the other contracting party is aware of the purpose of the agreement, which is to attend the event
Step 4. Identify the non-fulfillment of the contractual conditions
If a contracting party fails to fulfill its obligations, failure to act could allow the second party not to fulfill its performance and terminate the contract.
For example, if a person is hired to paint a wall, the other contracting party must pay him for this service. If the painter does not fulfill his part of the contract (painting the wall), then the other party can avoid by law to perform the service that is due to him (paying for the service), because painting is the condition underlying the remuneration
Step 5. Negotiate a termination
If you know you want to terminate a contract, get in touch with the other party involved in the agreement, and try to negotiate the termination of the agreement. You and the other parties involved can cancel the contract by mutual agreement at any time. You could offer a compromise, such as proposing to pay a fine due to cancellation, return payments received during the term of the contract, or continue the agreement for a few more months. Be sure to write down any new agreements reached, which must be signed by all contracting parties.
Step 6. Claim the presence of a contractual infringement
If the person you contracted with does not knowingly abide by its terms, you may be avoiding compliance with your obligation. The contracting party who has broken the agreement has no right to complain about your absence. Since he has committed a contractual infringement, he has no right to challenge your termination.
Method 2 of 3: Rescue or Cancel a Contract
Step 1. Rescue the contract
Termination - or cancellation - of a contract brings the contracting parties back to where they were before signing it. This is a total cancellation of the agreement and may be allowed in some circumstances. You must look for the termination clause in the contract, which will have specific instructions. It also indicates the period of time in which this can be done. If you are still within this time frame, you must follow the instructions in the contract to cancel it.
For example, a termination clause could indicate that all contracting parties can write to each other and formally cancel the agreement. To declare the termination of the contract, you can use a predefined form or a simple letter. From the moment the letter has been written, a certain amount of time must elapse for this decision to have legal force. Find out about your specific case
Step 2. Some contracts may be oral, but others require the written form
They include the sale of assets that exceed a certain value, the sale of land or real estate, the payment of another person's debts, marriage contracts, and contracts that cannot be completed in a year. You should be able to terminate a verbal agreement for these matters, as they need to be in writing for them to be legally taxable.
Step 3. Address the lack of the cancellation clause
If your contract does not have it, consult a lawyer to find out if there is a cancellation period that you could re-enter. Can't afford a paid service? You can be assisted by legal aid. Depending on the situation and the specific laws in your case, this time frame may vary.
- In general, it is possible to request termination if the contract was signed in danger or because of injury. In the first case, one of the two contracting parties or another person who induced the contracting party to sign was in danger (Article 1447 of the Civil Code). In the second case, we speak of injury (Article 1448 of the Civil Code), which occurs when one of the following conditions exists: lack of proportion between the services, economic difficulty that forced the injured party to enter into the agreement or opportunism on the part of the other contractor.
- To find out more, talk to a lawyer (you will find the addresses of your city on the internet).
- You can also apply to legal aid.
Step 4. Negotiate the resolution
If the contract does not have a termination clause and cannot be canceled for legal reasons, you can try to negotiate a termination with the other contracting party. You and the other parties to the contract may decide to cancel it at any time. This can be done even if the agreement itself indicates that it cannot be canceled. If you can persuade the other contractors to cancel it, be sure to put this agreement in writing, which must be signed by all parties involved.
Step 5. Consider the contract scam
You may be able to cancel a contract through fraud. The presence of deceptions in the behavior of a contracting party makes the cancellation of an agreement legitimate, because it causes an unfair profit and damages the other party (Article 640 of the Criminal Code). The scam can be malicious or negligent; the latter occurs when one of the contracting parties involuntarily makes an erroneous statement, believed by the other party involved, which is harmed.
For example, a real estate agent accidentally tells a buyer that the property he wants to buy is bigger than it actually is. The buyer decides to buy the property for its size. In court, the judge can determine whether a contractual fraud has been committed or whether it is possible to acquit the accused party. The decision depends on multiple factors; in case of fraud, the agent will have to pay the damages caused to the buyer and the contract will no longer be valid
Step 6. There is also malicious scam
This type of crime defines a misleading representation of reality and occurs when an individual intentionally lies about an aspect concerning the contract. If the other party believes it and is harmed in some way, it is a conscious scam. To be reported, you need to have concrete evidence to prove it.
For example, a house painter tells the employer that he will paint his living room brown using a specific brand of paint. Even knowing that he will use a different one, the lie is not concretely demonstrable. The landlord has requested a brown living room and he will have it. If the painter fulfills his obligation, the fact that he used the wrong brand does not matter. If, on the other hand, the paint is red, he has committed a deliberate scam
Step 7. Prove legal incapacity
There are certain types of people who do not possess the ability to make certain decisions for themselves. These individuals cannot enter into a legally binding contract. Age, inability to understand and want or being drunk can interfere with the ability to sign contracts. If you signed a contract without having the legal capacity, you can cancel it. If you have entered into a contract with a person who has no legal capacity, this contracting party can terminate it at any time.
Example. Melissa is 17 and signs a contract for a mobile phone service without her parents' permission. Since he is a minor, he cannot fulfill his contractual obligation
Step 8. To terminate a contract, you can demonstrate that you were forced to sign it under duress
If you have been forced, pressured or blackmailed to enter into a contract, it can be canceled. In fact, it is mandatory to sign an agreement knowingly and in full freedom, of one's own will, for it to be binding.
Step 9. Prove the illegality of a contract
An agreement that is entered into for illegal performance is void and non-binding. This means that any contracting party can terminate it at any time: by law, there is no contract. For example, Marco agrees to buy a brothel from Barbara for 500,000 euros. Since it is illegal to run such a business, both Marco and Barbara have the legal right to terminate the contract.
This is equally true if a factor comes into play that makes the action illegal after the contract is concluded. For example, Marco agrees to rent Barbara's property for a commercial purpose. Shortly after the signing, the city hall declares that this property is for residential use only. Since the reason for the contract is now illegal, both Marco and Barbara have the right to terminate it by law
Step 10. Decide if a mutual mistake has been made
These mistakes occur when the parties involved in the contract have misunderstood each other; actually they never reached an agreement because they didn't quite understand what it was about. If both you and the other parties involved have made a genuine mistake regarding the contractual details, the agreement may be canceled if the other party has not yet fulfilled their performance. Once you have noticed the mistake, the contract can be terminated.
For example, you bought a cow at a low price because you and the seller thought it was not fertile. Subsequently, you realize that it is. This would increase the cost. In this case, you and the other party have made a mutual mistake that can void the contract
Method 3 of 3: Addressing a Contractual Infringement
Step 1. Identify a contractual infringement
It occurs when only one party fails to fulfill its contractual obligation without an adequate legal excuse. The offense can be caused by a lack of performance, or by words or actions that indicate a lack of future executions.
Step 2. Retrieve what belongs to you
If you have signed a contract involving tangible assets (such as the sale of an item), you should have the right to fully recover the materials should the other party fail to fulfill their contractual obligation.
For example, you sell a boat to a neighbor and offer them an installment plan. However, if he stops paying you, you have the right to fully recover the boat, regardless of the partial amount he paid
Step 3. Mitigate your damage
If you are the victim of a contractual infringement, you can try to mitigate the damage caused by the error of the other party by looking for replacement goods or services of equivalent value to remedy. If the costs are more or less the same value as those of the original contract, you may not be entitled to compensation. However, if the cost is higher, you can ask the party who broke the contract to pay the damages (the difference between the amount you had to pay to remedy and the original cost).
- If you are the culprit, finding a remedy for your breach of contract as soon as possible can help you prove in court that you have done your best to avoid consequential damages or additional expenses due to your breach.
- Example: you signed a contract with a photographer to take your wedding shots. If the professional pulls back the week before the wedding, it will be necessary to immediately search for a photographer at the last minute. If the latter generates a cost equal to the original one, there is no damage. If, on the other hand, he asks you for an additional 500 euros for notifying him in advance, you can ask the first photographer to pay you a fine that amounts to this amount.
Step 4. Refuse to perform your performance
If you cannot perform your performance, you can deny yourself from fulfilling your obligations under the agreement. Refusing to fulfill contractual obligations leads to an infringement and you may be sued. Before choosing this path, you should consult a lawyer to make sure you fully understand all the consequences that come with such a decision.
Step 5. sue the party who broke the contract
If the other contractor has caused an infringement, you can sue them for the damage that this has caused. Make sure you have a copy of the contract, that you can specifically identify how and when it was breached, and that you document any financial or other damages that have been caused by the non-performance.
- You can hire a lawyer to sue, or you can deal with it yourself, although this is only possible in certain cases.
- You sue immediately after the breach of contract. In fact, there are time limits established by law. Waiting too long can prevent you from taking legal steps against the party who broke the agreement.
Step 6. Consider alternative dispute resolution methods
After the breach of a contract, the parties involved may decide to consider this option as a tool to put an end to a dispute. With this method, all contracting parties often share the cost of hiring a neutral mediator. This person will assist you in coming to a mutually acceptable solution. The trial includes an examination carried out by a neutral third party who is not a lawyer. This also includes negotiation and mediation.
