Litigation survival guide - part 1. Escape to victory: points to consider when terminating a contract

For a number of reasons you may wish to consider whether you can terminate a contractual relationship you have entered into. During periods of economic downturn the instances of this are greater. The other contracting party may be suffering from cash flow problems. There is a greater risk that you will be paid late or won't be paid at all. Performance is more likely to suffer when there are financial restraints on the other contracting party. Terminating a contract can itself bring risk. There must be a justifiable reason for terminating, otherwise you could be in repudiatory breach of the contract and liable to pay the other side damages.

Wragge & Co's experts provide some factors to consider prior to terminating any contractual relationship.