Contracts, as the saying goes, are made to be broken.
While breaking a contract isn’t a habit you want to make, it’s sometimes necessary as a matter of business. When that happens, there are several ways to go about it — some, admittedly, easier than others.
Here are some of your choices:
1. See if a reconsideration period applies
Also called “cooling-off” times, reconsideration periods are sometimes a feature in state law. They’re designed to keep people from falling for high-pressure sales techniques. For example, in Ohio, business opportunities are subject to cancellation within 5 days of the agreement.
2. Ask to be let out of the deal.
Look at the contract first and see if there is any clause that addresses the situation. Many business contracts tacitly acknowledge the fact that circumstances can change unexpectedly by using a clause that allows for the contract to be cancelled in exchange for a nominal fee.
In addition, simply asking to be let out of a deal can work miracles. When your deal is with a company that wants to do business again later, they may have more to gain by letting you out of the deal — and earning your gratitude — than they do by forcing it on you through litigation.
3. Break the contract
If you don’t have any other option, you can break, or “breach,” a contract. It’s important to realize that you can’t do this for free (which makes either of the first two options listed here preferable) — because the other party will likely take you to court to demand some form of restitution, compensation or damages. There are times, however, it simply makes more sense to let the court determine what you owe for breaking the contract than it does to fulfill it.
It’s generally wise not to make any hasty decisions regarding a contract. If it is clear that you aren’t going to be able to meet a contract’s terms, consider exploring all your legal options before you act.