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Reasons you can legally terminate a business contract

On Behalf of | Jun 18, 2021 | Business Law |

Sometimes parties get into a contract, only to find out at some point that things are not working out as they expected. 

You may be able to terminate the contractual agreement in that situation under certain circumstances, but you must first determine if you meet the legal requirements to do so.

What are some circumstances that may nullify a contract?

Many scenarios can invalidate a contract

Parties to a contract must have the mental capacity to understand the legal consequences of entering into such an agreement. Therefore, a judge may declare a contract invalid if evidence one of the parties to the contract lacked a full understanding of the implications of their actions at its signing. 

Any evidence that later comes to light that someone signed a contract due to someone else threatening them with physical harm may also warrant a judge voiding a contract.

Instances in which errors in facts, misrepresentations or fraud result in someone signing a contract may give way to them being able to petition the court to invalidate it later on. 

Last, any situation in which one or both of the contracted parties fails to live up to their contractual obligations, such as failing to deliver certain goods or services, may also warrant a canceling of their contract. 

Do you meet the grounds to terminate your contract?

Business contracts happen every day, but a meeting of the minds can still fail to take place. If you have entered a contract under false pretenses, then you may be able to terminate the contract and possibly recoup your losses.

The legal jargon contained in contracts can be difficult to understand, so you may find it helpful to have an experienced advocate help make sense of what it says for you. Then, you can explore your legal options.