Termination of a Contract

• 1). Initially, obtain a copy of the executed contract to determine whether there is any provision that discusses the termination of the contract. If there is a termination provision, review what responsibilities one has with respect to the termination and then act in accordance with these responsibilities. For instance, the provision may state that the contract may be terminated upon written notice to the other party.
  
  
• 2). In the event that there is no termination provision, review the contract for a rescission provision. A rescission provision usually permits either party to a contract to cancel the contract without penalty. If this provision exists, abide by the terms of the provision that specify how to provide a rescission. Also, check to see if there is a notice provision that specifies how to provide formal notification of the rescission.
  
  
• 3). In the event the contract does not contain a termination or rescission provision, discuss the matter with the other party or parties to the contract. The matter may be resolved between the parties and the contract may be mutually terminated upon agreement of the parties.
  
  
• 4). Check the contract to locate the notice provision. This section will indicate how a party should notify the other party regarding any matters in the contract. Follow these notice provisions to advise the other party that you cannot complete the contract.
  
  
• 5). Terminate the contract by an inability to perform based upon unforeseen circumstances (known as "impossibility of performance"), by fraud committed by the other party which caused you to enter into the contract or by an outright breach of the contract (where one refuses to complete one's obligations in the contract).