What do you do when your business outgrows the need for a contract? According to the contractual obligations you agreed to when you signed it, you can’t just arbitrarily decide to end the contract. At the same time, continuing the contract may be detrimental to your business. In such a situation, it’s important to understand your options for terminating a contract and when you have valid grounds for termination.
Before you make a potentially costly decision, consult an experienced lawyer at Weisblatt Law Firm, PLLC, to discuss whether you have grounds for contract termination in Texas and what your next steps should be.
Grounds for Contract Termination in Texas
The first thing contract lawyers do before assisting their clients in terminating a contract is determine the legal grounds for termination. There are several legitimate reasons you might seek to end a contract, including the following:
Mutual Agreement
If you and your business partner both wish to end the contract, this is the best-case scenario. When all parties are in favor of terminating a contract, you’ll need to agree on what exit strategy to take. Typically, you’ll decide on an end date and wind down completing any obligations you have remaining.
The easiest and most straightforward way to terminate a contract is to get both parties to agree to end it.
Breach of Contract
If the other party has violated the terms of the contract, ending the contract is one way to potentially resolve the dispute without having to engage in litigation. If you file a lawsuit against the other party, the judge might also choose to terminate the contract as part of their decision.
Convenience
Some contracts allow one or both parties to terminate the agreement after providing proper notice to the other. There’s often a penalty or cost associated with this convenience, though that cost may have been paid upfront when the terms of the contract were negotiated.
Force Majeure
Both parties may be freed from the constraints of a contract when an extraordinary event beyond their control makes it impossible for them to fulfill the obligations in the agreement. This principle is known as force majeure.
Natural disasters like hurricanes or floods are a common example of such extraordinary circumstances. For instance, if a storm destroys your manufacturing facility, most courts would find you exempt from satisfying a contractual agreement to manufacture goods for a customer. In such a scenario, your company couldn’t reasonably be expected to fulfill the terms of the contract, and penalizing you for circumstances beyond your control would be unjust.
If you’re looking to end a contract early in Texas, you’ll need the assistance of a knowledgeable contract attorney. Contact our firm at (713) 666-1981 today to schedule a free phone consultation with a seasoned business law professional.
Notice Requirements for Contract Termination
Once your attorney has determined appropriate grounds for terminating a contract, the next step is to notify the other party. Notifications should always be in writing so you can show when you provided them if necessary in court.
When our legal team gives notice, we reference the contract, including any specific escape clauses that are relevant to the action we’re taking. We generally provide notice through certified mail or some other method that can be tracked and documented.
Consequences of Improper Contract Termination
You must be careful when terminating a contract — if you don’t do so lawfully, you could be the subject of a lawsuit for breach of contract. The consequences of losing a breach of contract lawsuit can be devastating. You’ll probably be fined, and you may even be directed to continue your contractual obligations for longer than you would have if you had just waited for the contract to end.
At the Weisblatt Law Firm, PLLC, we stress the importance of documenting all communication and actions while terminating a contract. With this crucial precaution, you’ll have the means to defend yourself if you’re sued for breach of contract, which can potentially happen as many as four years after you end an agreement.
Best Practices for Contract Termination
The best way to terminate a contract is by using one of the built-in termination clauses in the agreement. All contracts should include a duration or a means for exiting the contract. If one of those methods allows you to escape the contract with minimal consequences, you can take advantage of it.
But what can you do when such an option isn’t built into the contract? If you’re on good terms with the other party, the best course is to initiate negotiation. By being honest about your desire to leave and offering reasonable compensation for ending the contract early, the other party is more likely to be amenable to the idea of terminating the agreement on mutually agreed-upon terms.
Why Choose the Weisblatt Law Firm, PLLC, for Ending a Contract in Texas?
Our firm has decades of experience representing businesses in Texas. We’re familiar with all aspects of contract law and have helped numerous clients terminate contracts for various reasons.
Ending a contract doesn’t have to be a hassle, but it does have to be legally sound. If you don’t have the law on your side, your business could face financial difficulties. Our veteran team has an impressive record of helping business owners navigate the complexities of contract law without running afoul of legal problems.
If you’re committed to minimizing your risks during the termination of a contract, schedule a phone consultation with one of our experienced lawyers as soon as possible.
Work With a Contract Termination Lawyer in Houston Today
Every contract ends eventually. Unfortunately, some may not end early enough for the good of your business. When you need to leave a contract sooner rather than later, our trusted legal team will help you find a legitimate and low-risk way to do it.
Want to protect your Texas business when bringing a contract to an end? Call the Weisblatt Law Firm, PLLC, at (713) 666-1981 to discuss your legal options with an experienced business attorney.
Attorney Andrew Weisblatt
Mr. Weisblatt has practiced continuously since becoming licensed in 1992 and has represented businesses ranging in size from one person start-up ventures to multi-national corporations employing hundreds of people in multiple countries. From 2005 through 2009 Mr. Weisblatt was in-house counsel and chief operating officer of a multi-national corporation in the steel products industry. That in-house position provided valuable insight into how businesses work and what they actually need from their lawyers – both in-house and outside counsel. Attorney Bio
