When to terminate a contract

Perhaps you avoid using a contract because you believe that a person’s word is more valuable than any piece of paper. Well, perhaps that works for you. But what if you want to get out of a deal and you’ve only got a verbal contract? How would you defend yourself, if the client sued to get you to deliver?

Despite all best intentions, sometimes consultants and clients have a hard time working together. For example, if a consultant is repeatedly ignored or challenged on advice, the consultant and the client may not be meant for each other. If the differences can’t be worked out, then it may be wise to dissolve the professional union. Trying to salvage a faulty relationship can be time consuming and costly. 

But how do you get out of a contract? It’s not as complicated as you might think. Your written contract should outline the process for terminating it. Depending on where you live, you may be able to dissolve a contract simply by having both parties agree — that’s called mutual dissolution. The two parties agree to go their separate ways and render the contract void. Where most people err, though, is that they agree to dissolutions orally. Instead, it would be best to have something in writing, proving both parties have agreed to dissolve the contract. This can avoid any potential challenges to the dissolution that may arise at a later date.

(By the way, I’m not a lawyer and this is not legal advice.)

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