The truth is most of the time you can’t get out of a contract. The court’s job is to enforce contracts. A contract is a legally binding agreement that places mutual obligations on the involved parties. It usually requires an offer and an acceptance of the offer by parties who are lawfully deemed competent to enter into this type of agreement. A contract is a serious promise, and there can be serious consequences if the contract is intentionally or unintentionally broken. Some of the most common cases in today’s small claims court likely involve some kind of contract breach. if you need to know how to get out of legally binding contracts, you need to know that there are legal ways to void contracts that you’ve signed. It just depends on how the contract was written because, contracts are written or oral agreements, they are typically enforceable by law. There are some circumstances where you can break a contract. These include actions (or lack of actions) in fulfilling the commitment and any statutes intended to protect consumers. There are many reasons you may want or need to terminate a contract. A contract may be terminated if certain conditions have changed since the contract was created. Some contracts may also be voided if the contract was never legal in the first place. If you decide to terminate a contract, you should make sure that the termination will result in the least amount of damages for you.
Breaking out: How to legally end the contract
The first step in getting out of a contract is to re-examine the initial agreement. Pull out a copy of your lease, membership agreement or loan paper work, and look closely at the language. In many cases, conditions for cancelation are included. Moreover, the legal system seriously frowns upon contracts that heavily favor one side and these agreements are called ‘unconscionable’ and contain terms so outrageous that they ‘shock the conscious.
• The other person gives up first: If the other party backs out first or gives any indication that he or she is no longer interested in upholding his or her end of the deal, you’re typically free from the contract. In legal terms, this is called an anticipatory breach or anticipatory repudiation.
Misrepresentation or Fraud
Fraudulent misrepresentation is a civil tort arising out of contract law. It is a false statement of fact that causes or induces someone to enter into a contract. A defendant commits fraudulent misrepresentation when he or she lies or misrepresents an important fact about in order to cause or induce the other party to enter into a contract. The misrepresentation can be in the form of anything that is designed to deceive the other party including innuendos, half-truths, or silence when there exists a duty to speak. Contracts depend on clear expectations, definite terms and a transparent subject that spells out all the details. Generally, in order for an action for misrepresentation to proceed, the statement at issue must be one of present or past fact. Although there are exceptions, statements of opinion and statements which are made about the intention of a party or occurrence of some event in the future do not constitute the tort of misrepresentation. So therefore, contracts can be terminated.
In the first instance, a party who wishes to get out of a contract can do so if there is no valid contract—there was no offer, acceptance or consideration.
There are various situations in which a contract can become invalid, void or enforceable. An example of such is a contract that does not follow any of the three requirements needed to be valid, which will cancel or declare them invalid in the name of the law. You want to also take caution against illegal agreements in business law. Other circumstances that can create an invalid contract include:
1. If the contract involves illegal activity.
2. If the contract pertains to a mutual mistake.
3. If the contract was made at gunpoint.
4. If the contract’s purpose is illegal.
5. If the consideration, offer or acceptance requires an action that is against the law, such as robbery, distribution of drugs, gambling, etc.
6. If the contract is against public policy.
The parties must have the capacity to enter into a contract for it to be binding. Minors, for example, are generally not allowed to enter into contracts and people who are found incompetent don’t have the ability to form a contract. The law assumes some individuals — such as minors or the mentally handicapped — don’t have the mental capacity to understand the contract. Someone too mentally limited to understand the meaning and effect of the contract can have it voided. Minors can void most contracts, but if the contract is still in force once they become adults, they lose that option.
Also known as duress also encompasses the same harm, threats, or restraint exercised upon the affected individual. Duress is distinguishable from Undue Influence, a concept employed in the law of wills, in that the latter term involves a wrongdoer who is a fiduciary, one who occupies a position of trust and confidence in regard to the testator, the creator of the will. Duress also exists where a person is coerced by the wrongful conduct or threat of another to enter into a contract under circumstances that deprive the individual of his or her volition.
Therefore, a party to a contract cannot induce the other party to enter into a contract through force. Duress is another cause for legally breaking a contract. If you can prove that you would not have ordinarily entered into a legally binding agreement, had it not been for a threat or coercive tactic used by the other party to the contract, you can most likely convince a judge to annul the deal. Your competency to evaluate the offer and freely accept it has been seriously impacted by the other party’s intimidation. Duress is a defense to a contract. Duress is wrongful pressure exerted upon a person in order to coerce that person into a contract that he or she ordinarily wouldn’t enter. Duress involves an intentional use of force or threat of force in order to induce the contract. It can be either physical or mental coercion, but the coercion must be to the extent that it deprives the other person of free will or freedom of choice. This means that the person is left with no reasonable alternative other than to enter the contract.
The parties typically enter into an agreement because they believe they can fulfill the promises contained in the agreement. However, if something beyond the control of the parties makes it impossible to complete, then the contract may be voided by the court. A contract can be ended early in the case of impossibility. This situation arises when one party’s duties have become impossible to fulfill, not from any action on the person’s part If property necessary for the fulfillment of the contract is stolen and can’t be replaced, then the contract is impossible to perform. However, if you destroyed the necessary piece of property yourself so you can get out of the contract, then impossibility doesn’t apply and you’ll still be liable in a lawsuit.
Many types of long-term and automatically renewing contracts have a termination clause. This gives you the steps you need to take if you want to terminate the contract. If you know you want to terminate a contract, contact the other person involved in the contract. Attempt to negotiate an end to the contract. You and the others involved can cancel the contract by mutual agreement at any time. A common termination clause says that the person who wants out of the contract must notify the others involved of his intent to do so. This must be in writing and within a certain number of days from when they want to end the contract or when it will be automatically renewed. Termination clauses may include fees for early termination. Be sure you are willing to pay the penalty before using the clause and terminating the contract.
Frustration or Impracticability
Contracts can also be terminated on the basis of frustration or impracticability, but these conditions can sometimes be tougher to prove in court. Impracticability is a situation when fulfilling the contract is completely unreasonable. Frustration means that the contract’s overall purpose has been shot down. This means the contract’s lost all its value due to something that happened outside of either party’s control. If any of the events that causes the impracticability or frustration were foreseeable, meaning one of the parties could predict they would happen with reasonable certainty, then these may not be grounds for ending the contract without liability. Frustration of purpose occurs when the reason behind entering a contract goes away. To be able to terminate a contract based on frustration of purpose, the purpose of the contract must be known by all parties involved. You may be able to terminate the sub-lease contract if the other party involved was aware that your purpose for the sub-lease was right.
Identify a failure of condition
If one party fails to fulfill his end of a contract, that lack of performance may allow the second party to terminate his end of a contract.
Claim breach of contract. If the person you are in the contract with knowingly fails to keep the terms of the contract, you may terminate your end of the contract. The person who broke the contract has no right to complain that you ended the contract. Since she breached the contract, they have no say in whether or not you terminate the contract. When you breach, a court (or more likely an arbitrator) will determine what the breaching party owes for the contract. This can include:
• Compensatory damages, the amount paid to the non-breaching party to get the job done elsewhere;
• Restitution, in which you give back any money you didn’t earn through working to fulfill your obligation; or
• Liquidated damages, a contract provision that calls for you to pay a certain amount when you breach. Even if your contract contains a liquidated damages clause, it’s possible that a court may find the clause to be unenforceable for a variety of reasons.
Completion of the contract
A contract is essentially terminated once the obligations outlined in the contract are completed. Parties should keep documentation showing that they fulfilled their contract duties. Documentation is helpful if the other party tries to later dispute the fulfillment of your contract obligations. A court of law will require proof of contract fulfillment if a dispute occurs.
Take Advantage of Your State’s “Cooling Off” Period: Many states have “cooling-off” laws which allow for cancellation of a contract if it is done within a certain timeframe, such as within three days (72 hours) of signing. Unfortunately, Utah doesn’t really have this.
Rescission of the Contract
A rescission of a contract is when a contract is terminated because an individual misrepresented themselves, acted illegally or made a mistake A contract rescission may take place if one party is not old enough to enter a contract or if a elderly person is not able to make legal decisions because of incapacity.
If you find yourself in court, this could be used as a defense if you can show the court that one of the parties maintained significant bargaining power over the other, so the weaker party was unable to effectively bargain or negotiate the terms of a contract or otherwise have a choice.
Lack of Specificity
Vague or ambiguous contracts are very dangerous. In Utah, the general rule is that extrinsic evidence may not be introduced to prove terms of a contract (this is called the “parole” in contracts). However there are many exceptions to this rule, and if a contract lacks any specific terms a court may declare the contract void unless extrinsic evidence can help the court obtain the true intention of the parties.
Right of Rescission
Some contracts allow you to opt out without any consequences if you do it within three days of signing. In Utah, for instance, you can rescind a contract for the sale of more than in goods you purchased somewhere other than in the seller’s place of business.
If you want to get out of a contract, don’t despair. These are various number of potential ways to extricate yourself from an unwanted contract. This will take some time and effort, but a good contract lawyer can guide you on all of the above points.
When you need a contract lawyer on your side, please call Ascent Law LLC for your free consultation (801) 676-5506. We want to help you.
8833 S. Redwood Road, Suite C
West Jordan, Utah
84088 United States
Telephone: (801) 676-5506