Normally, an agreement concluded within the framework of common law is terminated if the obligations provided for by such an agreement are considered fulfilled. However, under some circumstances, the contract may be terminated even before its execution. There are several ways to terminate a contract in England.
Please note that you can get more information on termination of contracts at Common Law by contacting IQ Decision UK.
The first way to terminate a contract at common law is by fulfilling all obligations contained therein. Despite the fact that the rule regarding the termination of a contract in England through fulfilment of obligations seems quite logical, it must be borne in mind that the performance of the contract must be complete and final. However, there are some exceptions to this rule.
If a contract provides for “separate obligations” (e.g. occasional payments), then such an agreement will be considered completely fulfilled even if some part of the payment is still due. The question of whether an obligation can be considered separate is a matter of interpretation and will be decided on the basis of the circumstances of each particular case.
Another exception is the material performance of a contract drawn up at common law. What this means is that if the parties have fulfilled the most significant part of their obligations, then the contract will be considered fulfilled; however, it may be necessary to pay monetary compensation established by Common Law inasmuch as the obligations under common law haven’t been fulfilled. However, this exception calls for additional interpretation of the “essential performance of the contract” concept. In order to understand what constitutes essential performance of a contract in England, it is necessary to pay attention to the facts of the case & establish which terms of the contract, drawn up in accordance with common law, are the most important.
Another exception is the situation in which one party prevents the other from fulfilling their obligation. In such a case, the plaintiff can either file a claim for damages or apply the quantum meruit principle.
If a deadline for the fulfillment of obligations is provided for in an agreement concluded under common law, the parties may terminate the agreement only due to a violation of the deadline & only if the time of fulfillment of obligations is the determining factor on the basis of which the agreement was concluded.
The second way to terminate a contract at common law is through breach of contract. Breach of contract is defined by English law as a situation in which one of the parties, without any legal justification, doesn’t fulfill or refuses to fulfill what is required by the contract, or fulfills their obligations in bad faith.
Common Law - Contractual Violations
Violation of a contract concluded under English law, which occurred before the onset of performance (a situation in which one party notifies the other party of its unwillingness to fulfill obligations under the contract before the due date for the performance of such obligations).
The third way to terminate a contract at common law is due to circumstances beyond the control of the parties. In accordance with this principle, a contract may be terminated if it becomes known that there are circumstances that make the performance of obligations impossible or illegal.
At the moment, three situations in which termination of a contract is possible due to circumstances beyond the control of the parties:
- a situation in which a new essential condition has been incorporated into the contract;
- a situation in which the contractual obligations were changed (such a change that affects the main purpose of concluding a Common Law contract);
- a situation in which the performance of the contract is considered illegal.
As far as the 3rd situation is concerned, there are several cases in which the execution of a common law contract may be considered illegal. For example, the subject of the contract was destroyed or ceased to be available. In addition, there may be cases when a person who is necessary for the performance of contractual obligations cannot contribute to the performance of such obligations due to illness or for another reason. The latter situation causes significant delay in the performance of contractual obligations in the English legal system.
Termination of a contract due to circumstances beyond the control of the parties envisages:
- recovery of funds paid in advance;
- recovery of work already completed;
- collection of remuneration received as a result of partial performance.
Termination of contracts is one of the most complex aspects of the English legal system. If you’re having trouble understanding all the intricacies involved in it, you can always let IQ Decision UK handle it for you. Our team of highly qualified legal; experts will be happy to fulfil all your legal needs & deliver the result you’ve been looking forward to achieving.