In the realm of contracts, “buyer’s remorse” is not a feeling you want to experience as a party to a binding agreement. Unfortunately, people sometimes sign contracts without thoroughly reading the terms or fully understanding what they’re signing. From lease agreements and health club memberships to purchase agreements and personal guarantees, contracts can be difficult to break.
So what can you do when you need to terminate an agreement? The answer is “it depends.”
Your Options When the Contract Has a Termination Clause
If you want to be released from an agreement, the first thing you should look for is a termination clause. Some contracts contain provisions that address what happens when a party to the agreement wants or needs to end the bargain. In most cases, these termination provisions require you to give notice of your intent to terminate the agreement to all parties to the contract. Termination clauses frequently also require a terminating party to have a specific reason for ending the contract – and in many cases the “approved” reasons are enumerated in the termination clause itself. It’s also likely you will have to pay some sort of penalty for being released from your obligations.
Your Options When the Contract Doesn’t Have a Termination Clause
Of course, it’s very possible that the contract you want to terminate doesn’t include a termination clause. In these situations, you have a couple options. Typically, we begin by reaching out to the other party (or parties). It’s sometimes possible to negotiate a solution that allows you to end the agreement without litigation. If that fails, you can simply stop honoring your responsibilities, although this is very rarely a wise course of action, as it puts you in breach of the contract and exposes you to liability. Many clients are surprised to discover the consequences of breaching even relatively simple contracts, such as health club memberships. If the agreement obligates you to pay a significant sum of money, it may very well be worth the other party’s time and money to sue you for it.
Consult with a Lawyer Before You Sign
You should always consult with your attorney before entering into any type of contract. Whether you’re contemplating an apartment lease, mortgage, or gym membership, you will save yourself a lot of hassle and money down the road by ensuring your interests are protected from the start. Your attorney will thoroughly review the terms of the agreement and flag any provisions that are unclear or require revision. The money you spend for a basic contract review can potentially save you thousands down the road if the agreement turns sour.
At the Law Office of Randy L. Smith, LLC, we help individuals, business owners, and entrepreneurs make smart decisions about a variety of contracts and other legal documents. Call us today at (417) 841-2775 to discuss your needs and goals.
This website has been prepared by The Law Office of Randy L. Smith, LLC for informational purposes only and does not, and is not intended to, constitute legal advice. The information is not provided in the course of an attorney-client relationship and is not intended to substitute for legal advice from an attorney licensed in your jurisdiction.