Contract Termination Date: Everything You Need to Know
A contract termination date will be outlined in the contract itself.4 min read
A contract termination date will be outlined in the contract itself. In order for a termination date to be legit, all parties involved in the contract must have met all of their obligations. Generally, a contract will have a set of completion terms, meaning once all terms have been met, the contract can then be considered complete.
For example, if you have signed a contract that states you will deliver a vehicle to a person on July 10, 2019, for $1,500, then once the money has been received and you have switched the title to the car over into the person's name, then the contract would be considered complete. Once a contract has been fulfilled in its entirety, there is no further action required by the involved parties.
When Are Contracts Used?
Contracts are used when two or more parties make promises to one another, such as:
- Creating a business together
- Selling a piece of property to a buyer
- Agreeing to perform a certain action
- Agreeing not to perform a certain action
Contracts on Obligations, Not Time
It is important to always base the fulfillment of a contract on the associated obligations, not on time itself. When all parties involved in the contract have fulfilled their obligations, then, and only then, can the contract be considered complete. Just because a certain date outlined in the contract has passed, this does not mean anything if the parties have not kept their promises and met all of the conditions stated in the contract.
How to Pinpoint the Contract Termination Date
You should always read through a contract and check for a stipulated end date. If the contract has a specified date, this is the day when the contract will terminate. If preferred, a party can actually override the ending date when it is in a written contract. On the other hand, if the parties want to continue the contract after the specified end date, this is possible, but all parties involved must agree.
Take for example, you have signed up for a movie streaming service and when you sign up, you agree to a 12-month membership. The contract will end after the 12 months have passed, but if you still have access to the movie streaming service and you don't say anything to the provider, then the contract is still in effect. This does not mean, however, that you don't have to pay for the service. You will still pay for the service and the movie streaming provider can cancel your membership at any time because you did not agree to have the service for any more than 12 months.
Can Contracts Be Continued Under a Verbal Agreement?
You should also take note of the fact that contracts can be continued when a verbal agreement has taken place. In order for this to happen, a verbal agreement has to be made between both parties, and it is highly recommended to have this agreement recorded. When a verbal agreement has been put into place, it is difficult to pinpoint when the new end date is.
For example, you have hired a tutor for a period of six months. Once the three months have passed you agree to keep obtaining their services, but you don't specify a new end date. This means, at any time you or the tutor can cancel the contract without any breach of the contract taking place.
Importance of Putting a Contract in Written Form
It is always best to have a contract put into some type of written form. This doesn't mean it has to be hand-written, rather just in some type of text-based form. Having a written contract is extremely important when creating a new contract or when having an existing contract modified. Ideally, you will also make sure that any new or modified contract will specifically state its end date. This helps protect all parties involved.
Can a Contract Be Terminated Before Its End Date?
It is possible to end a contract before its specified end date, but only when all parties involved agree to do so. This type of mutual agreement is especially beneficial when both parties want out of the contract, but the end date is not anytime in the near future. An excellent example of when this type of agreement would be of the utmost value is when two people start a business together, but then decide they do not want to operate the business together. They could agree to go their own separate ways without any type of consequence.
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