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General Lawyers

How do you get out of a contract worth half a million?

A client recently asked for half a million dollars.

Their company signed a contract to share construction costs for an office worth almost $500,000 The contract was signed by the director. However, the business owner soon found a better option. He gave the director the task to withdraw from the agreement. Then, conclude a new contract with a more lucrative developer.

We were sent a completed contract for legal examination. It contained standard conditions for termination. However, these did not allow the shareholder to unilaterally terminate the contract, merely changing his mind about building an Office.

A contract can be ended by agreement between the parties. Or upon request by one party to the court. This would mean that the second party would have to violate the terms of their contract in a serious way.

In other words, the shareholder did not have any reason to terminate the contract despite the fact that the contract was not violated by the developer in significant ways and without his consent.

He was required to pay the half-million dollars stipulated in the contract. In case of late payment, he would also have to pay a penalty.

I advised the client’s director to meet with the developer to discuss the possibility of a mutually agreed upon termination of the contract. There was no other choice. I thought it was futile to write formal letters, as the client had originally intended, because a formal question would lead to a formal response. No one can cancel human relations or understanding.

He did exactly that, and he told the developer’s management about the situation. He also expressed his desire to have the contract terminated by the parties. The developer accepted and the parties signed an agreement terminating the contract.

I completed the task given to me. The question was still whether the client understood, when signing the contract that he would have half a million dollars if the developer did not consent to it being terminated?

There are several options to terminate a contract according to the Republic of Belarus’ Civil Code. Standard: By agreement between the parties or in court in the event of a significant breach by one of its obligations under a contract. The details were provided in the contract.

However, the Civil Code contains a “trick”: a unilateral refusal of to perform the contract. This is a trick that few people are aware of or confuse with unilateral termination.

The only difference between unilateral renunciation or unilateral termination is the process.

If one party refuses to perform the contract unilaterally, the other party must send a notice to the other party. The contract is considered terminated if the notice is not received within the time period specified in the contract.

The court is the only way to end a contract unilaterally. The first step is to make a proposal to the other party to end the contract. The initiator of the termination must file a court action to terminate the contract if she does not reply or refuses.

The second distinction is the ground for unilateral refusal or unilateral termination.

No grounds are necessary to refuse unilaterally to perform a contract. It doesn’t matter if the contract or law allows for such a possibility (which is not the case in this case). For example, unilateral refusal is allowed by the legislation when a contract is being executed for supply or services. This does not apply to shared construction.

To terminate a contract on the initiative of one party, however, it is necessary that the other party has committed a serious violation of contract terms. Material breaches can vary between contracts. Material breaches can be different for different types of contracts.

It is important to ensure that it will be possible for you to cancel the contract at any time, especially if it is for a large amount. It is important to understand that the contract doesn’t follow the rule “I want execute, I don’t want to execute.” The contract must be signed in its entirety and executed on time. If not, the contract is subject to legal responsibility and “-1” in karma.

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