The contracts toolkit
Ways out of a contract
A contract may be ended in the following ways:
By termination notice
Where one party brings the contract to an end by giving notice to the other party.
Where each party has completed his or her side of the bargain and nothing more remains to be done.
The parties may decide to end the contract (with or without changes) and mutually abandon their obligations.
In this case the 'injured' party is entitled to claim damages or compensation for the loss caused by the breach. The aim is to put the person not at fault in the same financial position had the contract been performed in its entirety. The contract may expressly provide what should be paid in the event of a breach or if litigation is necessary, the court will decide. If there is a breach of a 'condition' of the contract or an important term, the innocent person may treat the contract as at an end and sue. For example, if a promoter engages an artist for two separate performances and agrees to pay a fee after each, but fails to pay after the first night (in breach of the agreement) the artist is entitled to terminate the contract, refuse to perform again and sue for damages. A 'force majeure' clause in a contract may state that a person will not be in breach of the contract if the reason they have failed to comply is 'outside their reasonable control'. This might arise if, due to illness, traffic delays or extreme weather conditions, the artist is unable to reach the venue in time.
This occurs where, through no fault of either party, it becomes impossible to carry out the contract which automatically ends. For example, the contract could be frustrated if the venue was burnt down or the artist dies or is too ill to carry it out.