Can I Get Out of This Contract?

There are times when one party to a contract may want to terminate it.

This is a general list of what to look for when you are trying to determine whether you can or should terminate a contract.  This list is very general, and is not specific to any one particular type of contract.  

1.  How long is the contract term?   Look and see how long you have left on the contract.  If the initial term has run out, check the contract to see if you are now considered to have automatically renewed for a specific period or if you are now considered "month-to-month."  Analyze what you will spend (in money, time, and energy) by staying in the contract.

2. What notice must be given?   Some contracts specify how notice must be given (for instance, in writing and by certified mail and addressed in a particular way).  Verbal notice alone may not be legally sufficient to cancel or terminate the contract.  Mere words are subject to interpretation and won't give you the proof you need.  Witnesses to a conversation may later prove to be unreliable, unbelievable, or biased. .

3.  What will happen if there is a major disagreement ?   Before you get into an adversarial position with the other party, be sure to check out what could happen.  For instance, some contracts specify that the parties must go to binding arbitration.   The contract may specify that any lawsuit must be filed in a particular county or state.  There may be provisions regarding who will pay attorneys fees and court costs.  You will want to know all of your risks before escalating the situation.

4. Has anyone violated the contract yet?  Even if the other party has violated the contract in some way, you may not have the right to terminate it or stop performing.  You are more likely to be successful in pressing your position (especially in court) if you have "clean hands" and have lived up to your end of the bargain.  If you have already violated the contract in some way that you thought was forgiven, you may find that issue resurrected.

5. Remember to pay attention to the specific laws that relate to your contract.   There are certain specific and sometimes unique laws that relate to each of the following contracts and transactions: real estate contracts, mobile homes sales, applications for consumer credit cards, employment contracts, and contracts for the purchase of a vehicle.   In some purchases you may have a "cooling off" period that is either written into the contract or determined by state law.   You must gather information about the specific laws that relate to your contract.  

Despite all these warnings, there are times when you need to cut your losses.  Whether or not that is right for you is a specific question that must be answered based on the facts of the case, the particular area of law, and financial and practical considerations.