Ways in which Contracts may be Terminated

Contracts may be brought to an end:

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(a) By performance of the parties i.e. each party completing his obligations as stipulated by the contract.

(b) By frustration i.e. an event through no fault of the parties that make one party unable to perform the contract. For example:  if one party suffers a prolonged illness which makes him unable to perform the contract.

(c) By lapse of time i.e. if the time limit set for the contract to be executed  by both parties has been passed. For example, sellers of real estate usually require that the buyers pay the full balance on the property within a certain time period after the initial down payment has been made.

(d) By the mutual agreement of all parties.

(e)If one of the parties become bankrupt after the contract has been signed.

(f) By changes in law i.e. where a legal contract is rendered illegal through changes in law.

(g) By notice e.g. some firms require that employees give at least one month notice when resigning their positions.

(h) If one party dies.

(i) By breach of contract-When one party defaults on his part of the agreement i.e. he does not perform his part of the contract.

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