Getting Out of a Contract

Legally, you can't get out of a contract just because you've changed your mind. If you try, the other party will probably sue you for breach of contract. It's always possible that the contract includes a loophole or escape clause that allows you to get out, but you usually need a legally justifiable reason to declare the contract void.

The Other Party Backs Out First

You can typically get out of a contract if the other party gives you some indication that he's not going to uphold his end of the agreement. In legal terms, this is "anticipatory breach of contract" or "anticipatory repudiation." A "material breach of contract" occurs when the other party actually takes action to void the contract, such as if he sold something to someone else that you had contracted with him to buy.

The Agreement Is Unconscionable

Courts don't usually uphold contracts that are grossly unfair to one party. For example, you might contract with a cell phone provider, and you must sign their contract as-is and with no negotiation or you can't have service. This might be unconscionable, particularly if it's the only service available where you live and if the carrier charges you three times the national rate. In legal terms, this is an "adhesion contract." One party has all the power and uses it to achieve a contract that's lucrative but damaging to the other side.

Fraud Voids Contracts

Both parties to a contract must have a clear understanding of what they're agreeing to and each side must perform and deliver as promised. If you contract with someone to purchase a used car, and if he tells you it's in excellent condition, you have a right to rely on that. If you get the car home and the tires fall off because both axles have repeatedly been broken and soldered back together, the seller has committed fraud and you can get out of the contract. Fraud typically implies that the seller was fully aware of the broken axles, but it can also apply if he never had the axles checked before promising you that the car was in excellent condition.

Statute of Frauds May Apply

The statute of frauds doesn't relate to fraud in the sense that one party has deliberately deceived the other. It's a statute in the legislative codes of most states that requires written and signed contracts for certain types of transactions. Typically, these include long-term contracts where you'll be making payments over time, such as for a mortgage or auto loan. It may also apply to transactions over a particular dollar amount. If you don't have a written contract, your deal may not be enforceable, so check with an attorney who knows your state's laws to find out if you can get out of it.

An Contracts Law Attorney Can Help

The law surrounding breaches of contract is complicated. Plus, the facts of each case are unique. This article provides a brief, general introduction to the topic. For more detailed, specific information, please contact an contracts attorney.

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