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Can you get out of a contract?

On Behalf of | Nov 24, 2017 | Business And Corporate Law |

If most of your business transactions in Hazlehurst are executed by way of contracts, then you know firsthand of the security that comes from having such agreements in place. You know that your contractual partner is bound to complete his or her terms provided you are able to fulfill yours. Yet what if you are put in the position (either due to a failure by your partner to deliver on its promises or to the needs of your organization) of needing to terminate a contract? Can you do so legally? 

The American Bar Association lists two scenarios where you may be able to end a contractual agreement: either for convenience or for cause. “For convenience” means that you find that it is in the best interest (or for the convenience) of your organization to get out of your contract. In this case, your partner may not have necessarily done anything wrong. To end a contract for convenience, there typically already has to be language in its terms that permits such action. If there is and you choose to exercise this right, you will usually have to pay your partner for the work it has already done as well as any expenses associated with ending your business arrangement. 

If your partner fails to fulfill its contractual obligations, you may be able to terminate your contract for cause. If you do this, you may also be able to seek damages for breach of contract. Such damages may include: 

  • The costs required to complete a project
  • The expenses incurred as a result of your partner’s failures
  • Any unpaid balances your partner owes to you 

You should know, however, that if you are able to complete a project for less than you would have had to pay your partner, you cannot recover damages.