{"id":173074,"date":"2022-07-29T03:20:18","date_gmt":"2022-07-29T02:20:18","guid":{"rendered":"https:\/\/legalvision.co.uk\/?p=173074"},"modified":"2022-07-29T04:25:36","modified_gmt":"2022-07-29T03:25:36","slug":"terminate-business-contract","status":"publish","type":"post","link":"https:\/\/legalvision.co.uk\/commercial-contracts\/terminate-business-contract\/","title":{"rendered":"How Can I Terminate a Business Contract in England?"},"content":{"rendered":"\n<p>In the day-to-day running of your business, contractual relationships will inevitably deteriorate. Consequently, you may want to terminate your obligations under that agreement. Generally, you can terminate a business contract if:<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>a party breaches an essential term of the contract;\u00a0<\/li><li>an event activates<a href=\"https:\/\/legalvision.co.uk\/commercial-contracts\/contract-termination\/\"> a termination clause<\/a>;<\/li><li>another party made a misrepresentation regarding the contract;<\/li><li>you and the other party mutually agree to end the contract; or<\/li><li>an unforeseen event frustrates your ability to perform your obligations under the contract.\u00a0<\/li><\/ul>\n\n\n\n<p>This article will explain how you can terminate a business contract in England.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">How Does Contract Termination Work?<\/h2>\n\n\n\n<p>Once a contract terminates, you can no longer enforce it. This means that any party to the agreement no longer has to fulfil their contractual obligations. For example, if you cancel a service contract, the service provider no longer has to provide their services. Nor do you have to pay for those services. In this sense, contract termination severs the business relationship between two parties.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">When Can You Terminate a Business Contract<\/h2>\n\n\n\n<p>You can terminate a contract if:<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>someone breaches an essential term of the contract;&nbsp;<\/li><li>an event triggers a severance clause;<\/li><li>you or the other party to the contract has made a misrepresentation;<\/li><li>both parties reach a mutual&nbsp; agreement to cancel the contract; or<\/li><li>an event frustrates the performance of your obligations under the contract.<\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">Breach of Contract<\/h3>\n\n\n\n<p>A breach is the most common ground that gives rise to contract termination. The clearest example of a breach is failing to perform a contractual obligation. If you or another party<a href=\"https:\/\/legalvision.co.uk\/commercial-contracts\/distributor-breach-contract\/\"> breaches an obligation under the contract<\/a>, the party who suffers a loss may have grounds to cancel the contract.\u00a0<\/p>\n\n\n\n<p>In saying that, a breach may not always warrant the cancellation of a contract. For a breach to amount to contract termination, it can fall into either of the following events.&nbsp;<\/p>\n\n\n\n<figure class=\"wp-block-table\"><table><tbody><tr><td><strong>Breach<\/strong><\/td><td><strong>Explanation<\/strong><\/td><\/tr><tr><td>Repudiation<\/td><td>Repudiation refers to words or actions that reveal your intention to be no longer bound by the terms of the contract.&nbsp;<\/td><\/tr><tr><td>Breach of an Essential Term<\/td><td>An essential term is so integral to the arrangement that you or your business associates would not have entered the agreement without that term. For example, in a contract for the sale of a printer, an essential term would be the seller\u2019s obligation to transfer the printer to the buyer.&nbsp;<\/td><\/tr><tr><td>Serious Breach of a Standard Term<\/td><td>A breach of a standard contract term can amount to termination where the breach is serious.&nbsp;<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<p>If you or another party fall foul of your obligations under a contract, you can be liable to the other parties to the agreement for damages.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Severance Clauses<\/h3>\n\n\n\n<p>A contract can terminate via a severance clause. Business owners often include severance clauses in their contracts to allow either party to cancel the contract in the future.&nbsp; Nevertheless, severance clauses often include additional obligations when terminating the contract, such as performing some sort of action or paying their business partners. <\/p>\n\n\n\n<p>One good example of a severance clause is when a consumer wants to terminate a mobile phone contract early by paying off the outstanding balance due on that contract. If there is a severance clause in your contract, you should read the clause carefully to ensure you fulfil your obligations before terminating the contract.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Misrepresentation<\/h3>\n\n\n\n<p>Misrepresentations occur when a person entering a contract provides other parties with false information.&nbsp;Businesses rely heavily on their partners to provide accurate commercial information that might be integral to the performance of a contract. If a person falsifies or lies about any information that harms your business&#8217;&nbsp; ability to perform its day-to-day operations, you could terminate the contract and claim damages.&nbsp;<\/p>\n\n\n\n<p>Some <a href=\"https:\/\/legalvision.co.uk\/disputes-litigation\/what-is-misrepresentation\/\">common forms of misrepresentation<\/a> include when a person:\u00a0<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>falsifies information that is integral to the performance of a contractual obligation;&nbsp;<\/li><li>lies about who they are or does not fully disclose the nature of their business;&nbsp;<\/li><li>knowingly incorporates a mistake into the terms of a contract; and<\/li><li>coerces you into signing a contract, otherwise known as undue influence.<\/li><\/ul>\n\n\n\n<p>If you think your contract contains some misrepresentation, you should speak with a lawyer to determine whether you can terminate the contract.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Mutual Agreement<\/h3>\n\n\n\n<p>There may come a time when you and your business partners have reached a stage in your relationship where you no longer want to be bound by a contractual arrangement. For example, your business might no longer need to continue paying for a specific service. Consequently, contracting parties can make a mutual agreement to terminate the contract. However, to do so, you <em>must<\/em> have the written consent of each party to the original contract.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Frustration<\/h3>\n\n\n\n<p>Frustration is a legal principle that allows parties to terminate a contract if an unforeseen event inhibits their ability to perform their contractual obligations.&nbsp;However, contract frustration is not as simple as saying your obligations under the contract are difficult to complete because of an event outside of your control.&nbsp;<\/p>\n\n\n\n<div  class=\"box box--icon box--info\">\n    <p>For example, suppose you have entered into a contract to sell a printer. However, the COVID pandemic has meant that the cost of delivering the printer exceeds what you had originally forecasted. While you incur a greater cost to deliver the printer, the contract is not necessarily frustrated. This is because your obligation to deliver the printer is not &#8216;radically different&#8217; from what you and the customer originally thought. Ultimately, you can still deliver the printer despite the hike in delivery prices.<\/p>\n<\/div>\n\n\n\n<p>In any event, you should seek legal advice before terminating a contract based on frustration.&nbsp;<\/p>\n\n\n\n\n<a href=\"#content-next\"\n   class=\"block p-4 mt-10 text-xl font-bold text-center text-white no-underline bg-gray-800 rounded-t-xl\">\n    Continue reading this article below the form\n    <i class=\"text-xl fa-regular fa-arrow-down\"><\/i>\n<\/a>\n<div class=\"px-6 pt-10 pb-12 mb-10 text-center bg-gray-100 rounded-b-xl sm:px-12 test\">\n    <div class=\"mb-8 text-2xl font-bold text-orange\">\n        Need legal advice?\n        <br>\n        <span class=\"text-lg not-prose\">\n                            Call <a href=\"tel:+448081968584\" class=\"not-prose\">0808 196 8584<\/a> for urgent assistance.\n                <br>\n                Otherwise, complete this form, and we will contact you within one business day.\n                    <\/span>\n    <\/div>\n\n    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If you wrongfully terminate a contract, you can be liable to pay damages to the other party.\u00a0<\/p>\n\n\n\n<p>If you need help terminating a contract, our experienced <a href=\"https:\/\/legalvision.co.uk\/contract-lawyers-lp\/\">contract lawyers<\/a> can assist as part of our LegalVision membership. You will have unlimited access to lawyers to answer your questions and draft and review your documents for a low monthly fee. Call us today on <a href=\"tel:+448081968584\" class=\"AVANSERnumber dynamic-number\">0808 196 8584<\/a> or visit our <a href=\"https:\/\/legalvision.co.uk\/membership\">membership page<\/a>.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Frequently Asked Questions<\/h2>\n\n\n\n<div class=\"schema-faq wp-block-yoast-faq-block\"><div class=\"schema-faq-section\" id=\"faq-question-1659060855580\"><strong class=\"schema-faq-question\"><strong>Is a contract enforceable after termination?<\/strong><\/strong> <p class=\"schema-faq-answer\">No. Once a contract terminates, anyone who was originally bound by that contract will no longer have to perform their obligations under the contract.<\/p> <\/div> <div class=\"schema-faq-section\" id=\"faq-question-1659060871529\"><strong class=\"schema-faq-question\"><strong>Who can terminate a contract?<\/strong><\/strong> <p class=\"schema-faq-answer\">Any party to an agreement can terminate a contract provided they have sufficient grounds to do so. For example, a party can terminate a contract if the other party has made a misrepresentation.\u00a0<\/p> <\/div> <\/div>\n<div class=\"not-prose m-feedback-prompt\">\n    <!-- Thumbs up\/down bar -->\n    <div class=\"m-feedback-prompt__main\">\n        <div class=\"m-feedback-prompt__title\">Was this article helpful?<\/div>\n        <div>\n            <!--span class=\"m-feedback-prompt__button--text\">Thanks!<\/span-->\n            <button type=\"button\" class=\"m-feedback-prompt__button m-feedback-prompt__button--yes\"\n                    data-analytics-link=\"feedback-prompt:yes\" aria-label=\"Agree\">\n                <i class=\"fa-regular fa-thumbs-up fa-3x\"><\/i>\n            <\/button>\n            <button type=\"button\" class=\"m-feedback-prompt__button m-feedback-prompt__button--no\"\n                    data-analytics-link=\"feedback-prompt:no\" aria-label=\"Disagree\">\n                <i class=\"fa-regular fa-thumbs-down fa-3x\"><\/i>\n            <\/button>\n        <\/div>\n    <\/div>\n\n    <!-- Feedback form -->\n    <div class=\"m-feedback-prompt__form\">\n        <div class=\"m-feedback-prompt__form--thanks \">\n            <div>Thanks!<\/div>\n            <p>\n                We appreciate your feedback \u2013 your submission has been successfully received.            <\/p>\n        <\/div>\n        <form id=\"contact-form\" class=\"m-feedback-prompt__form--form\" action=\"\" method=\"post\">\n            <input type=\"hidden\" id=\"authenticity_token\" name=\"authenticity_token\" value=\"9eb4f72322\" \/><input type=\"hidden\" name=\"_wp_http_referer\" value=\"\/api\/wp\/v2\/posts\/173074\" \/>            <input value=\"https:\/\/legalvision.co.uk\/commercial-contracts\/terminate-business-contract\/\" type=\"hidden\" name=\"currenturl\"\n                   id=\"currenturl\">\n            <input value=\"How Can I Terminate a Business Contract in England?\" type=\"hidden\" name=\"currenttitle\"\n                   id=\"currenttitle\">\n            <label>\n                <!-- display on thumbs-up -->\n                <span class=\"m-feedback-prompt__feedback m-feedback-prompt__feedback--yes\">\n                    Can you tell us <span class=\"font-semibold\">why<\/span> you found it helpful?\n                <\/span>\n\n                <!-- display on thumbs-down -->\n                <span class=\"m-feedback-prompt__feedback m-feedback-prompt__feedback--no text-lg\">\n                    How can we better improve this article?\n                <\/span>\n                <textarea name=\"feedbackmessage\" id=\"feedbackmessage\" required><\/textarea>\n            <\/label>\n\n            <div class=\"m-feedback-prompt__form--error\" id=\"form-submit-error\"><\/div>\n            <button id=\"submit-contact-form-button\" type=\"submit\" name=\"commit\" class=\"m-feedback-prompt__form--submit\"\n                    data-analytics-link=\"feedback-prompt:submit\">\n                Submit            <\/button>\n        <\/form>\n    <\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>In the day-to-day running of your business, contractual relationships will inevitably deteriorate. Consequently, you may want to terminate your obligations under that agreement. Generally, you can terminate a business contract if: a party breaches an essential term of the contract;\u00a0 an event activates a termination clause; another party made a misrepresentation regarding the contract; you<a href=\"https:\/\/legalvision.co.uk\/commercial-contracts\/terminate-business-contract\/\">Continue reading <span class=\"sr-only\">&#8220;How Can I Terminate a Business Contract in England?&#8221;<\/span><\/a><\/p>\n","protected":false},"author":13324,"featured_media":3163,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_relevanssi_hide_post":"","_relevanssi_hide_content":"","_relevanssi_pin_for_all":"","_relevanssi_pin_keywords":"","_relevanssi_unpin_keywords":"","_relevanssi_related_keywords":"","_relevanssi_related_include_ids":"","_relevanssi_related_exclude_ids":"","_relevanssi_related_no_append":"","_relevanssi_related_not_related":"","_relevanssi_related_posts":"1976,172547,2815,171747,2151,1469","_relevanssi_noindex_reason":"","editor_notices":[],"footnotes":""},"categories":[37],"tags":[20,21,39,68,597,821],"class_list":["post-173074","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-commercial-contracts","tag-small-business","tag-medium-business","tag-business-dispute","tag-contract-breach","tag-contractual-breach","tag-contract-termination"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.1.1 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>How Can I Terminate a Business Contract? 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