A contract is a legally binding agreement that can be written or oral. They play crucial roles in people’s personal and professional lives, and they can be signed for employment, insurance and real estate purchases. Despite their importance, they sometimes need to be broken because they fail to meet legal requirements or for the reasons listed below.
It’s Impossible to Fulfill
When the parties to a contract fulfill its terms, it is referred to as performance. However, when something happens that keeps the parties from fulfilling the contract’s terms, it’s referred to as impossibility of performance. In these cases, either side can break the agreement with no fear of legal liability.
Mistake, Misrepresentation or Fraud
A contract may be broken if the other side does something illegal, such as misrepresent matters or commit fraud. If both parties made similar mistakes in creating the contract, it can be dissolved without penalty under the rescission clause. Finally, contracts can be dissolved if either party is not of sound mind or legal age at the time of signing.
Ending Performance Due to Breach
If the other party breaches a contract, the victim no longer has to do his or her part. Breaches occur when either side refuses to do their part, when they do things they’re not supposed to, or when either side is prevented from fulfilling their obligations. Not every breach ends up in court; they have to be material to be significant.
Ending Contracts Through Prior Agreement
A contract can be ended through a prior agreement, which may occur when either party notifies the other in writing. When creating a contract, it’s important to be very specific about these matters, because the interpretation of unclear language may lead to a breach of contract lawsuit.
While most people do not carefully read every contract they receive, it’s vital to read those involving living arrangements, employment and medical care. Before signing these contracts, it may be wise to have them reviewed by a civil attorney. With an attorney’s help, a client can avoid being stuck in an unfair contract. Consult the Benedict Morelli Law firm for contract review and legal advice.