Are you searching for Contract Termination?
- Clauses are often found in business or commercial contracts that allow one party to terminate a contract.
- This is usually done when the other party hasn’t fulfilled an obligation by a date specified.
- One example, would be a contract of sale of business which may state that the vendor is allowed to terminate the contract if the purchaser hasn’t paid the purchase price by a date specified.
- This type of contact usually has a provision that states “time is of the essence” which means that the parties have obligations under the contract terms.
A contract for the sale of a business for example, the loss and damage that the vendor may look to recover would include the sale price. This would be contracted with the person who was the original purchaser less any amount for which the vendor in able to sell the business to another purchaser. The vendor needs to mitigate losses by making attempts to get a proper value for the business if they want to re-sell to another party.
Caution must be taken with contract termination for non-performance of an obligation even when in the contract it’s stated that time is of an essence. This is because some breaches are not serious enough for the rescission or termination of a contract. Time may have been of an essence when the contract was entered into or agreed to, the court may come to a determination that the party has waived that right in relation to the contract termination.
If time was never of the essence or ceased to be of the essence under the contract provisions, then the party not in breach is still entitled on a normal basis once they give the appropriate notice of termination of agreement, to give a reasonable time for their performance to the other party. This would then make time of an essence again.
These notices could be in any form, but must have the appearance of a notice. Some notices are in a certain form, and some are not. If you are thinking about contract termination, then you should get advice from a contract litigation lawyer as soon as possible.
This is an important step of the process and can have consequences in relation to business or commercial litigation and disputes that come after termination when the party that wasn’t originally in breach of that contract, terminates it without giving proper notification.
IF YOU ARE THINKING ABOUT CONTRACT TERMINATION THEN IT IS IMPORTANT THAT YOU SPEAK TO A SUITABLY QUALIFIED CONTRACT LITIGATION LAWYER TODAY
The company or person that was originally in breach may say that that the contract hasn’t been terminated on a valid basis. They may adopt a stance that the party wasn’t in breach or had an intention of not being bound by the agreement and decide to terminate the agreement on their own.
This has implications because losses and damages that a party can be entitled to may vary depending upon the party in breach at the time that a contract agreement was validly terminated.