Many contracts have clauses that state the various ways in which the agreement can be terminated. In general, a termination clause is a clause that sets out the conditions under which the contract may be terminated. Furthermore, this clause sets out any rights or obligations of the parties after the contract is terminated.

Voluntary Termination Clauses

Certain contracts contain a termination for convenience clause. This clause allows one or both parties to terminate the agreements for any reason without legal consequences. However, an early termination clause may also impose monetary penalties on the party that terminates the contract early. In most cases, the ability to terminate a contract—with or without penalty—will only be available under certain situations or for limited periods of time.

Other Grounds for Termination

There are many situations that may result in the termination of the contract even where there is no contractual language dealing with those issues. In certain cases, the court will treat the contract as terminated. If this occurs, the court will normally attempt to put both parties in the monetary situation they would have been had the contract been completed. However, in other situations, the court will rescind the contract and put the parties back in the situation they were in before the contract was created.

Common grounds for contractual termination or rescission include:

  • Illegality
  • Mistake of Fact
  • Agent’s lack of authority
  • Fundamental breaches
  • Pre-contractual misrepresentations
  • Repudiatory breaches or anticipatory breaches
  • Renunciation and refusal to perform
  • Statutory rescission
  • Common law rescission
  • Inequality of bargaining power
  • Duress and undue influence
  • Rectification, variation, and amendment
  • Failing to meet the conditions precedent

Force Majeure Clauses

Force majeure is the legal principle that allows for the termination of the contract or postponement of a party’s obligations where events occur that were outside the control of the parties and makes complying with the contract impossible. However, the applicability of force majeure depends on the contract and where you are trying to enforce the contract. If force majeure is not applicable, parties may seek to utilize the principle of frustration. While frustration can achieve similar goals compared to force majeure, it is more limited in its application compared to force majeure.

At Antonoplos & Associates, our attorneys review your rights, obligations, and options regarding your contract, including options for enforcing specific performance, obtaining alternative performance, or equitable claims for unjust enrichment in the event of a purported termination. Our law firm also commonly advises and represents you with respect to any post-contractual obligations, including non-competition, non-solicitation, and confidentiality clauses.

Court Orders Requiring Performance of Contract Obligations

Depending on the individual situation, one party in a contract may seek an interim, interlocutory, or permanent injunction that requires one party to perform the obligations within the contract or take steps to fulfill the contract. Sometimes this interim, interlocutory, or permanent remedy is viewed as a declaration and mandatory order.

With over 20 years of experience, our group of attorneys commonly advise clients on these and other types of urgent contractual remedies. Furthermore, a party that requires urgent remedies must not delay in receiving legal advice.

Common Types of Contracts

At Antonoplos & Associates, our attorneys advise clients on a wide variety of contractual arrangements, including:

  • Agreements of Purchase and Sale
  • Bills of Exchange / Promissory Notes
  • Commercial Contracts
  • Commercial Leases
  • Creditor/Debtor Agreements
  • Employment Contracts
  • Entertainment and Media Contracts
  • Event Contracts
  • Franchise Agreements
  • Guarantees
  • Insurance and Reinsurance Contracts
  • Joint Venture Agreements
  • Licensing Agreements
  • Loan Agreements
  • Management Agreements
  • Non-Competition and Non-Solicitation Agreements
  • Partnership Agreements
  • Publishing Agreements
  • Real Estate and Timeshare Agreements
  • Releases
  • Settlement Agreements
  • Sale of Goods Contracts
  • Shareholder Agreements

Other Termination Clauses

Most contracts also contain clauses that call for automatic termination of a contract if certain events occur or do not occur. These clauses also relate to:

Examples

  • Assignments
  • War clauses
  • Change of Law
  • Force Majeure, Acts of God, or other unexpected events
  • Impossibility or Frustration of contract
  • Non-performance or partial performance
  • Concert Cancellation
  • Non-payment, late payment, or partial payment
  • Bankruptcy
  • Cooling Off Periods
  • Conditions for Renewal
  • Illness or death
  • Waivers
  • Event Cancellation
  • Non-Appearance
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