Can I Immediately Terminate a Commercial Agreement When the Other Party Breaches It?

Commercial Agreements

Prepared by: Constantinople

The other party's breach does not always entitle you to end the relationship that same day. First, the obligation, whether performance is due and any applicable notice or additional time requirements are examined. Termination, rescission and damages may have different consequences. An incorrect notice may turn a dispute in which you have a valid claim into a new allegation of breach against you.

Prepare the signed agreement, orders, supplementary agreements, delivery documents and payment records together. Terms amended by email and the parties' previous practice may also matter. State clearly which work has been completed and to what extent, and whether you have performed your own obligation. Merely saying that the other party is late does not provide sufficient information about the reason for the delay and its legal consequences.

Statutory form requirements for certain notices between merchants must also be checked. The agreement's governing law, jurisdiction or arbitration clause may affect the route of application. Mandatory pre-action mediation may arise for commercial monetary claims; the same procedure does not apply to every contractual dispute. Heads of loss, opportunities to mitigate loss and contractual limits of liability are assessed separately when calculating damages.

Prepare the entire agreement, documents concerning the breach and any existing draft notice. Termination, additional time, negotiation and damages claims are compared according to the specific obligation.

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