How to Cancel Agreements

Null and void by choice or by agreement

There are a number of ways to cancel an agreement---some pursuant to a state or federal statute, some pursuant to the termination provisions of the agreement, some because of defects in the formation of the contract and some by mutual agreement of the parties. The method of termination is dependent on the basis for termination. For example, the federal Truth in Lending Act allows for cancellation of a mortgage agreement by letter within 72 hours of the date of signing. Similarly, many agreements contain termination clauses that permit termination with or without cause. Furthermore, the parties to a contract can agree to cancel the agreement.

Instructions

1. Research whether any state or federal law mandates a post-signing cancellation period or right to cancel with respect to the type of agreement you are seeking to cancel. Start with Internet research, and visit a local law library if the Internet resources you locate do not meet your needs.

2. Review the agreement at issue and determine whether it has a termination or cancellation provision. Contracts generally contain provisions allowing cancellation for cause and without cause. Cancellation for cause is permitted in situations where there is a material breach of the agreement, where one or more provisions of the agreement is ruled invalid or unenforceable by a court of law and such ruling makes achievement of the purpose of the agreement impossible, or where one of the parties files for bankruptcy or assigns its assets for the benefit of creditors. Ordinarily, cancellation following a material breach must follow written notice and an opportunity to cure. Cancellation without cause is usually permitted after a designated period of time following written notice.

3. Review the agreement and determine whether it is defective in form. The elements of a valid contract are legal capacity or competence, offer and acceptance, mutual consideration (something of value in exchange for something else of value), and compliance with law and public policy---the object of the agreement is lawful and not otherwise contrary to public policy. The absence of any of the elements outlined above will serve as a basis for cancellation.

4. Contact the other party to the agreement and request his consent to cancellation of the agreement. This step may only be necessary if none of the bases for cancellation outlined above is present. However, parties to contracts generally are unlikely to agree to cancellation unless they realize some benefit from doing so.

5. Draft a notice of cancellation addressed to the other party or parties. This notice should be dated and should state the basis for cancellation. For example, if cancellation is pursuant to a statute, a contract termination provision or a defect in the form of the agreement, you should specifically identify the statute, provision or defect and point to the clause or language permitting cancellation.