Most business owners rely on contracts to frame relationships with clients, vendors, and other individuals or companies. You may use contracts to make sure everyone understands their rights and obligations. In a perfect business world, contracts would run smoothly, and nothing would ever go wrong. But we live in a real world that changes, sometimes in ways that make you want to break a contract. While this can be done, you have to be careful how and when you do it.
How to Break a Contract
Before you do anything, you and your attorney should review the contract carefully. Contracts are legal documents usually drafted to be enforceable, but also often contain provisions related to terminating the contract. If so, see if the provision applies to your contract and follow that provision. You may need to give the other party notice or pay a cancellation penalty. However, it may be worth it if you really need to break a contract.
If your contract seems unbreakable, you and your business lawyer may try to negotiate with the other party. Mediation could be a way to resolve your differences quickly and without litigation on either side.
It might help to review the events that led up to the signing of the contract. Did the other party misrepresent anything? Is there some reason the contract is unenforceable other than your desire to terminate it? Sometimes the other party may have engaged in behavior that gives you a good reason to end your relationship.
When You Know It’s Time
As you and the other parties perform the obligations contained in the contract, you may notice signs that it is time to consider breaking your contract. In addition to fraudulent misrepresentation leading up to the contract, the following reasons could arise:
- You can no longer perform the terms of the contract.
- A natural disaster or emergency has made performance impossible.
- The other party breaches or defaults on the contract before you do.
Although all parties to a contract are expected to adhere to it, sometimes business just does not go as planned.
When You Need to Break a Contract, Talk to Us First.
Just as it is wise to talk to an attorney before signing a contract, it is also wise to get legal advice before attempting to terminate one.
Attorney Richard Sierra at the Florida Small Business Center assists clients like you with business and litigation matters. As always, Our Goal Is to Help You Succeed™. For an appointment, you may call us at 1-866-842-5202 or use the contact form on our website. We represent clients throughout the State of Florida, including Coral Springs, Coconut Creek, Boca Raton, Delray Beach, Pompano Beach, Sunrise, Fort Lauderdale, Miami, West Palm Beach, Jupiter, Deerfield Beach, Stuart, Port St. Lucie, Orlando, Naples, Fort Myers, Sarasota, Tampa, and surrounding communities.