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Prematurely ending a contract

On Behalf of | Apr 28, 2019 | Commercial Litigation, Firm News |

Boston companies who have contractual agreements with their business partners likely feel quite secure in the safety of those accords. They represent stability in that they have guaranteed work to do while those agreements are in place. Yet just how strong is a contract? The common school of thought is that a contracted partner cannot end such an agreement prematurely without cause. Otherwise, they would be in breach of contract and potentially subject to litigation. 

Per the Cornell Law School, breach of contract whenever a party is in violation of a contractual obligation. Common instances of breach of contract can include: 

  • Failing to fulfill a contracted promise 
  • Refusing to accept work already stipulated in a contract 
  • Interfering with another party’s attempts to fulfill a contracted promise

When a contractual partner is found to be in breach of contract, the wronged party may have multiple options available to them in terms of legal recourse. One may be to seek damages to help cover the costs associated with the breach. Another may be to seek to end the contract themselves (with the breach having provided them with cause to do so). 

Cause typically must be present in order to end a contract before its terms have been fulfilled. There is, however, an exception to this rule. Certain parties may be able to terminate a contract “for convenience,” or without having to provide a reason other than it being convenient for them to do so. The Congressional Research Service reports that this privilege is automatically afforded to government organizations. Private companies can only cite it if the actual terms of the contract offer them that benefit.