Contracts: termination

by Practical Law Commercial and Practical Law Restructuring and Insolvency

A practice note discussing the law on terminating a contract under a contractual clause or at common law. The note starts by outlining the practical steps that a party should take to terminate, including assessing the termination rights available, checking for any limits on those rights, assessing the implications of termination and alternative options, and ensuring compliance with any cure or notice procedure. It goes on to discuss how termination rights, whether contractual or arising at common law, may be lost and the consequences of terminating without a right to do so. It also explores the common law right to terminate for repudiatory breach, and other common termination events such as insolvency, material or persistent breach and non-payment. Finally, it considers when a contract may be terminable on reasonable notice without an express term, explains the effect of termination on a contract and offers some alternatives for bringing a contract to an end.