Contracts are integral to business and personal transactions, providing a legally binding agreement between parties. However, there are instances when a contract may need to be terminated. Terminating a contract can have various consequences, including releasing parties from their contractual obligations, potential legal liability, and the need for the parties to seek alternate arrangements. I will discuss the elements that would terminate a contract in this paper.
First, the most common way to terminate a contract is through performance. A contract is considered fulfilled when the parties have executed their obligations under the agreement. Once the “the contractual obligations have been realized”, the stakeholders are no longer bound by the agreement. For instance, a house purchase contract is terminated when the buyer pays the agreed amount, and the seller transfers the property title to the buyer (Rıgga, 2019). Similarly, an employment contract is terminated when the employee completes the agreed-upon tasks, and the employer pays the agreed-upon compensation. Also, a contract may be terminated by the operation of law, which occurs when external factors beyond the parties’ control make it impossible to perform the contract (Catterwell, 2022). Such circumstances include acts of God, natural disasters, war, or government regulations. For instance, a construction contract may be terminated due to an earthquake that damages the construction site beyond repair. A government-imposed lockdown may prevent the parties from fulfilling their contractual obligations. In such cases, the contract is terminated without requiring the parties to perform further actions. (Order for Homework Help Online)
Subsequently, parties may mutually agree to terminate a contract. Such agreements can be in writing or verbal and must be made to end the contractual relationship. In such cases, the parties should document the termination agreement to avoid future misunderstandings (Rıgga, 2019). For instance, a business partnership agreement may be terminated when the partners agree to dissolve the partnership and divide the assets and liabilities among themselves. In addition, a contract can also be terminated if performance is impossible. The impossibility of performance can occur if the contract’s subject matter is destroyed or if performance is illegal or impossible due to unforeseen circumstances (Zhang, 2019). If the performance is impossible, the contract may be terminated. Hire Professional Essay Writers online
Moreover, a contract can also be terminated if one party accepts a contravention of agreement. If one stakeholder breaks the contract, the other party may have the liberty to end the agreement. However, if the non-breaching stakeholder continues to perform under the agreement, they may be considered to have accepted the breach. In this case, the contract will continue, but conform to party demands may be entitled to damages for the contravention (Catterwell, 2022). Also, if one stakeholder breaks the contract, the other stakeholder may have the liberty to remedies. Remedies for contravention of contract can include damages, specific performance, or contract cancellation. Damages are financially reimbursed for the unwanted outcome caused by the breach. Particular operation is a court order demanding the contravening stakeholders to abide by their obligations under the agreement. Cancellation of the contract is the termination of the contract due to a breach. However, a contract can also be terminated if there is malpractice. Malpractice occurs when an expert, is unable to provide the expected standard of service. If a professional breaches their contract by committing malpractice, the other party may have the right to terminate it. Therefore, parties to a contract need to understand their rights and options in case of a breach. Depending on the circumstances, the non-breaking stakeholder may be entitled to coverage such as particular or performance damages (Rıgga, 2019). If the breach is severe or involves malpractice, the non-breaching party may have the liberty to end the agreement. It is essential to involve a legal expert to determine the best action in such situations.
In conclusion, contracts can be terminated for various reasons, including malpractice, acceptance of breach of contract, the impossibility of performance, the voluntary agreement of parties, remedies for breach of contract, discharge by operation of law, and performance. Understanding how a contract can be terminated is important to protect your legal rights and obligations. When entering into a contract, it is critical to have an option for the probable risks and benefits of the agreement and to seek legal advice if necessary.
