Getting Out of a Contract
Often times we enter in a contract, or a lease agreement and things go according to plan. However, there are also instances where one party, for whatever reason, needs to breach the agreement and break their obligations in the contract. This can occur in a lease agreement where a tenant is seeking to get out of the tenancy; when a buyer or seller agrees to purchase or sell an item and later change their mind after they signed the agreement, or any of the other everyday scenarios we face in our lives.
At first glance, when you don’t perform your contractual obligation, you would be held in breach of the contract. However, it is important to know that in some instances the law will give you an “out” and let you out of the contract for legal reasons. Other times, even though you are still legally obligated to the other party, it may actually be a better business decision to breach the contract and face the legal consequence because the legal obligation may be cheaper than performing pursuant to the contract.
In the first scenario, there are instances where you could be legally allowed to not perform your contractual obligations. Some of these include being excused to pay rent because the home could be uninhabitable (in a tenancy agreement); the item to be sold or purchased is defective or destroyed; or an event has occurred where it has become impossible to perform or the purpose of the agreement has been frustrated.
In the latter scenario, of making the business decision to not perform your obligation, it is important to look ahead at the consequences to ensure you know what monetary damages you could be potentially exposed to, if fraud or other legal issues could arise from your action, and how to mitigate any liability you face. Making the right decision can save a lot of time and money.
The Law Offices of Chung & Ignacio can assist you in analyzing your rights and making sure you make the best decision.