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How Can a Business Get Out of a Contract in Florida?

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Is your business locked in a contract that is no longer favorable? There are a number of different reasons why this can happen—from changes in the objectives of your company to shifting of macro-economic conditions. This raises an important question: How does a business in Florida get out of an undesirable contract? In this article, our West Palm Beach commercial litigation attorney highlights the three main options for getting out a contract in Florida.

 Option #1: Exercising an Early Termination Provision Within the Contract 

As a starting point, businesses in Florida looking to escape for a contract should review the terms of the agreement itself. In some contracts, there is a provision that allows one party to terminate the agreement before the completion of the contract. You will often hear this type of contract clause referred to simply as an “early termination” provision. Businesses should closely review the terms and conditions specified under this provision. Generally, these clauses may require the terminating party to give notice within a certain period and possibly pay a termination fee. Of course, there is not an early termination option in every contract. Further, in some cases, exercising that option may not be the most cost-effective option to escape contract obligations.

 Option #2: Review All Legal Justifications to Void Agreement (Without Liability)

 Beyond an early termination option, there could be legal justifications that allow a business to void a contract without liability. These may include instances where the contract is found to be fraudulent, induced by duress, mistake, or undue influence. It may also be possible to void a contract if it is found unconscionable, meaning it’s excessively one-sided or unfair to one party. Further, a contract may be terminated if it’s discovered that it involves illegal activities or violates public policy. Beyond that, a business could also have an excuse from contract performance based on commercial impracticability or commercial impossibility. An attorney can help parties review these options.

 Option #3: Negotiate an Exit of the Contract With the Counterparty 

What is there no early termination option and there is no legal excuse for non-performance? In most cases, the best option for a business will be to make a good faith effort to negotiate termination with the counterparty. Businesses can engage in discussions with the counterparty to renegotiate the terms or seek a mutual agreement to terminate the contract. When opting for this route, it is essential to maintain open communication and adopt a collaborative approach to reach a resolution that is acceptable to both parties.

 Contact Our South Florida Business Litigation Lawyers Today

At Pike & Lustig, LLP, our Florida commercial litigation attorney is an experienced advocate for clients. If you are looking to escape from a contract, we are here to help you determine the best path forward. Contact us today for a fully confidential consultation. From our office in West Palm Beach and our office in Miami, we advise businesses and organizations throughout Southeast Florida.

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