How to terminate a contract.

Contract termination can be a challenge. Learn what situations can help you terminate a contract you no longer want.

A contract is a legally binding agreement tying the signees together — however, sometimes you may need to get out of an established contract. In these cases, it’s essential to handle the contract termination correctly to avoid potential lawsuits. These tips can help you terminate a contract.

Look for termination clauses.

Many contracts include terms for how the parties can terminate them. If your contract has them, it can be relatively easy to get out — simply check if the termination clauses apply to you and inform the other parties.

Identify breach of contract.

You can void most contracts if one of the other parties has failed to honor their established obligations. If you can identify and prove a breach of contract, you can terminate the agreement.

Claim impossibility of performance.

If you can’t reasonably fulfil your obligations under the contract, you can try to claim contractual impossibility. This isn’t usually a recommended approach — you’ll have to prove the impossible conditions are due to the other party’s actions or an act of nature.

Declare frustration of purpose.

Every contract serves a purpose, and if that purpose disappears — or is “frustrated” — you can terminate the contract. For example, you can terminate the lease if you rented out your house while you worked overseas, but social upheaval forced you to return home.

Negotiate with your partners.

You may be able to solve your problems with an honest discussion. Explain to your partners why you want out of the contract, and they may oblige you. You could even offer an incentive, like a cancellation fee, to sweeten the deal.

Share termination notices quickly.

Timeliness is essential when terminating contracts. Digital documents make it fast and easy to send both salescontracts and termination notices. With Adobe Sign, you can share documents with multiple recipients, request and track e-signatures, fill and sign agreements, and more.

Discover how Sign can help you smoothly handle all your contracts.