A contract is a formal agreement between two parties to undergo a transaction of either goods or services as defined in the terms and conditions of the contract. To prematurely terminate, or void a contract, there must either be mutual consent between both parties or a violation of the terms and conditions of the agreement.
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Review the terms and conditions of the contract to determine if it is still in effect. If the duration of the contract has already expired, check to make sure no amendments to the contract were made to extend the contract on either side.
Also review the contract regarding predetermined terms and conditions regarding the termination of the contract, such as a 30-day notification clause, which may void the contract upon transmission of intent.
Contact the other party of the contract to negotiate a mutual termination of the contract on a good faith basis. Explain the reason and intent of the termination if based on rival bidding, hardship or significant service or product issues. If the intent is to terminate the contract, allow the other party to attempt to negotiate a contract readjustment to allow them the perception that the agreement can be maintained.
For a mutually accepted termination, request an amendment to the contract for immediate termination and for the terms altered to reflect contract performance already rendered. Also request a counter signature for the amendment.
Review the contract and any referenced terms, tariffs or laws under which the contract falls under for possible breaches. Check to see if the contract terms violated public policy or law and would therefore be unenforceable. Maintain a log of any actions that may have questionable legality along with a copy of the transaction paperwork.
Also review the terms and conditions against the services or products provided to determine if there were any breeches in the agreed transaction. Confirm if there was mutual consent in the terms and conditions of the product, quote and services rendered in the contract.
Confirm there is a mutual understanding between all parties involved that the contract is voided, preferably in writing.
Tips and warnings
- Maintain records for all communications regarding the contract termination in case of later protests or court actions. For good measure, have contracts reviewed by a legal analyst and the contract agreement and amendments notarised.
- Maintain a hard copy record of e-mails, phone conversation notes, and copies of signatures to validate the voiding of the contract process.
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