Every year, a business purchases hundreds of services and goods to facilitate its operations. However, a lack of understanding of your rights when engaging with other companies can get you trapped in unwanted contracts. And as business lawyers in Central Florida, we wouldn’t advise you to go on with an arrangement that is not helping your business grow.
The most appropriate way to get out of a contract depends on your unique situation and the contract terms. In some instances, you can get out without being sued, and in other circumstances, you might pay the price. It is therefore critical to explore the best possible alternative as soon as possible.
What is the Easiest Avenue to Get Out of a Contract?
Getting out of a contract is way easier if your B2B contract contains a clause that allows you to terminate it. So, if you feel the need to end business engagements with another party, consider reviewing the contract document to see if such a provision exists.
Note that such provisions are often written in legal language, and it is easy to miss out on them. That’s why you need to discuss your desire with a Daytona Beach small business contract lawyer, and they will help you review the document and tell you the options you have.
You’ll find that most contracts give parties the right to get out under certain conditions. Some require you to provide proper notice in advance, pay the penalty, or meet certain obligations before ending the contract prematurely.
Must I Remain in a Contract Where the Other Party Has Breached?
If the business you entered into a contract with does not live up to their end of the agreement, you have no business holding on to it. They could be unable or simply unwilling to do so, which gives you the legal grounds to terminate the agreement.
But before concluding that the other party is in breach, make sure that you review the contract carefully and note the areas that have been breached. The contract can also be canceled if the other business made mistakes while entering the contract or entered it under fraud or misinterpretation.
If you are unsure about whether or not the other business is in breach, it is advisable to seek the counsel of a business contract lawyer in Central Florida to remove any doubts.
How Do I Get Out When I Cannot Perform My Obligations?
You can exit a contract without being sued, if you are unable to fulfill your obligations because of a particular event or circumstance. However, the reason has to be something that’s beyond your control. For example, if someone key to the execution of the contract dies or becomes incapacitated, your business can be excused from its obligations.
Another example is a natural disaster or destruction that makes it impossible for you to continue with the contract. Businesses shouldn’t get worried when they encounter challenges that are beyond them because the law doesn’t consider it a breach if you approach it appropriately.
Negotiations to end a contract involve explaining to the other party the reasons why you cannot go on with the contract. Remember to be specific and recommend mutually agreeable solutions. Consider doing this in an in-person meeting, through a letter, or involve a mediator to facilitate the negotiations.
What Happens When I Get Out Through a Breach?
Breaching a contract isn’t as bad as most people think it is – it doesn’t make you a bad person because it is an amoral action. When all other options fail, and the contract is no longer beneficial to your business venture, breaching might be your only way out.
You could decide to simply not perform your obligation as stipulated in the contract. An arbitrator or the court will determine the price you pay. It could include:
- Liquidated Damages – This is the contract provision that requires you to pay a certain amount when you breach.
- Restitution– You might be asked to give back any payment received for obligations that you didn’t perform.
- Compensatory Damages – You may have to pay the money that the other business paid to get the work done elsewhere.
Note that, the court can find the liquidated damages provided in the agreement unenforceable for several reasons. Talking to a Daytona Beach business contract lawyer is critical in exploring possible loopholes.
Are Businesses Entitled to a Cooling-off Period?
Unfortunately, businesses cannot enjoy a cool-off period after getting into a contract because a cool-off only covers a trader-consumer relationship. So, anyone acting on behalf of a business is not considered a consumer, thus being protected by this law.
While ordinary buyers can easily cancel a purchase and get their money back within the cooling-off period, you do not have such pleasures as a business. If you change your mind the same day, the next day, or two weeks later, you cannot get out that easily. You will be expected to stick around and fulfill your obligations.
This explains why business people have to be extra-cautious when entering into business dealings and only agree to terms that will benefit them. Mistakes are easier to avoid when you consult with a Florida attorney every step of the way. If you failed to involve them during the drafting of the agreement, make sure that they read through it before you append a signature on the dotted lines. They can decode the legal language for you and ensure that the terms are appropriate.
Sound Legal Counsel From Your Business Partner
If you have been caught up in a “business contract gone wrong” situation, you can still get out of it. It might not be devoid of challenges, but it is doable. It is important to work with a Florida business lawyer that understands how businesses work and what the law says before you find yourself in a legal catastrophe.
Working with one of the top counsels in Florida can give you a positive experience and the best outcomes. Talk to us today at (850) 888 8992 to get solutions, regardless of the size of your business.
After graduating from Davidson College, Melody Lankford earned her J.D. from Florida State University’s College of Law in 2004 and was admitted to the Florida Bar that same year. Ms. Lankford joined Raydon Corporation as in-house counsel in 2004. She worked there until 2012, when she founded the Lankford Law Firm. She is an experienced Daytona Beach small business attorney who offers sound legal counsel and experience-based insights to her business clients