Original Source: Houston Chronicle

“A contract is a legal document that binds at least two parties to one another and requires them to meet certain obligations detailed in the contract. In some instances, contract termination can occur that will make the contract void of legal binding. Only the parties involved in the agreement may terminate a contract.

Impossibility of Performance

A contract typically requires one or more parties to do something, which is called performance. For example, a company may hire and sign a contract to have a public speaker talk at a company event. Once the public speaker fulfills his duties agreed upon in the contract, it is called performance. If for some reason it is impossible for the public speaker to fulfill his duties, it is called impossibility of performance or sometimes “frustration.” For example, if the speaker weer seriously injured and no one could replace him, that would be impossibility of performance. The company has the right to terminate the contract in this scenario.

Breach of Contract

When a contract is intentionally not honored by one party, it is called a breach of contract and is grounds for contract termination. A breach of contract may exist because one party failed to meet his obligations at all or did not meet his obligations fully. For example, if you purchased a product that did not arrive until a day after the agreed upon delivery date, that is an immaterial breach of contract. However, if your order did not come until two weeks after the delivery date and it affected your business, then that is a material breach of contract. Generally, with a material breach of contract, the injured party has the right to seek monetary damages for his losses as well as cancel the agreement…”

http://smallbusiness.chron.com/5-ways-terminate-contract-16020.html 

Contributors: Open Source
Categories: Industry Articles, SIG U Resource