Question

What is contract termination? Under what circumstances can a contract be terminated? What are contract amendments? How can a contract be amended?

Please no hand-written answers.

Answer 1

Ans.

Contract Termination

Contract termination means to end the contract before it being fully or partially performed by the parties. The purpose of a contract termination is to discharge the parties involved from their unperformed or partially performed obligation under the contract.

Circumstances under which a contract can be terminated

A contract is a legal document or obligation which binds two or more parties to one another. The parties involved needs to meet some obligations mentioned in contract. In some cases, termination of contract can occur that will make contract void. Only parties involved in a contract, can terminate the contract. Some of the circumstances which may lead to terminations of a contract are as follows.

• Breach of Contract: Breach of contract is said to be occurred when a binding agreement is not honored by one or more parties involed in contract by non performance. It can happen when a party to a contract fails to fulfil its obligation either partially or fully.
• If the contract is Impossible to fulfil: Sometime, something happens that make it not possible to do or perform what is mentioned in the contract. In legal terms that is called impossibility of contract. In case it becomes impossible to perform what is mentioned or agreed in contract.
• Contract termination by prior Agreement: A contract can be terminated in case, there is a prior agreement that calls for termination of contract due to some specific reason. The reason should be specific in the agreement and there should be a proper detail about what qualifies as the reason for termination of contract.
• Termination of contract because of misrepresentation or Fraud: Either party can terminate a contract if the other party does something wrong, something which can be considered as fraud or misrepresentation regarding any matter that is important to the original contract. Termination of a contract because of these reasons is called rescission.
• Termination of a contract because of completion of the contract: A contract is said to be terminated once the obligations mentioned in contract are completed by the involved parties.

Contract Amendments:

A contract can be change or modify by the using a contract amendments. Contract amendment is a separate legal document which changes the terms and conditions of an existing contract by adding, modifying or removing certain obligations and benefits outlined under that existing contract. All parties involved in contract must agree to the amendment. An amendment doesn't mean the replacement of whole original agreement. Contract amendments refers to just one or few parts that is to be modified.

How to amend a contract

There are certain steps which should be follow properly in case of contract amendments. First of all, it is very necessary to review the contract and check what is says about amendments. After reveiwing the contract, if it is amendable than the second step is to propose the amendment with other parties involved in the contract. Consent of amendment from all the parties involved is mandatory. Finally, if all the parties involved in a contract agrees to amend particular clause, there are mainly three different style which are as follows.

-> Replacing an entire clause: As per this method, simply mention that a whole clause has been replaced with the new one.

-> Describing the amendments: In this method of amendment, it is require to describe the changes only. This seems shorter and easiest method to amend a contract but apart from the amendment done, the parties needs to look at the existing contracts as well.

-> Amendment through redlines and strikethroughs: As per this method, deletion or additions to the contract are shown visually. If there is any addition, it should be underlined. And in case of deletion, the text should be crossed out.