Some contracts need to be terminated before they are complete. It won't always be because of a dispute.

It is important that small and medium business owners end their agreements properly to avoid having to pay out large amounts of money to other party.  

Here are three termination options that a small or medium business owner should consider.

1. Look to the Contract

It may be obvious, but the contract could have some termination rights that can be used.

For example, some contracts allow one or both party's to simply end the contract without any reason. Usually this requires giving the other party a certain amount of written notice.

However, be careful if the termination right you want to rely on is tied to a breach or wrongdoing of the other party. These breach or default type termination rights can be hotly disputed. So make sure you get some legal advice or assistance before you use them.

2. The Contract doesn't help me – Now What?

If you can't rely on a termination right in a written contract, this doesn't mean you are stuck in the contract until it expires. There are other legal rights of termination available via the Courts.

This includes termination due to breach of an essential condition and termination because a party is unwilling or unable to perform their obligations. Because these require going to court, you will need a lawyers help.

3. Agree to go your separate ways 

Going to Court is a costly exercise most business owners will be looking to avoid. But there may be another option.

Just like you negotiated your way into the agreement, you can negotiate your way out.

Where there is no clause in your contract that allows termination, both parties can agree in writing to terminate or end the contract. It is recommended that you evidence the mutual agreement to end the contract via a Termination Agreement prepared by lawyer. A lawyer will make sure the Termination Agreement contains appropriate releases to protect you from future liabilities. This is very important.

SLB Legal can help you if you need to end a contract. Click here to book a free 15-minute initial call to discuss your contract with us today.