The terms of your contract may provide a way out without penalty.
Contracts bind multiple parties to a relationship that ends at a predetermined time. The purpose of the contract is to clearly outline each party's responsibilities to each other and to set limitations on what is and is not acceptable under the contractual terms. A binding contract, as the name indicates, has no legal defects and prevents all parties from breaching without penalty. As such, the ways in which you can leave a binding contract are limited. The most common ways include reaching the original pre-determined end of the contract, finding legal defect and finding the other party in material breach of the contractual terms.
Instructions
1. Read the contract over to ensure no term states that the contract has already naturally ended due to the occurrence of a specified event. For example, some housing contracts have terms stating that the purchase agreement ends if the potential buyer cannot find a loan at a specific interest rate. Thus, if a loan that fits the contractual description cannot be found, the contract ends. Both parties can leave the binding contract without fear of penalty.
2. Analyze the contractual terms to find any misrepresentation. In contract law, both parties must contract in good faith. Finding bad faith on the part of the other party can make the contract legally void. Furthermore, even an accidental mistake by the other party can invalidate a contract. If the mistake is material (i.e., severely impedes the purpose of the contract), then you can walk away from the contract.
3. Argue impossibility -- that the contract cannot be performed as stated. Impossibility has a high legal threshold as you need to prove that the contractual terms are impossible for anyone to complete. For example, suppose a painter contracts with a homeowner to paint a house. A severe paint shortage does not make the painter's job impossible, only significantly harder and more expensive. On the other hand, the destruction of the homeowners house makes it impossible for anyone to paint the house. If you can prove the contractual terms are impossible for anyone to complete, the contract effectively ends.
4. Show that the other party is in material breach of the contract. If the other party to the contract cannot perform or refuses to follow the contractual terms, that party has breached the binding contract and you can walk away from the agreement. Additionally, you can sue for damages caused by the breach.
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