How to Break Agreements

A contract provides details of an agreement, including the steps for breaking it.

Several types of agreements exist, such as rental agreements, purchase agreements and service agreements. An agreement, or contract, constitutes a meeting of the minds between two or more parties. It may be written or implied, which is often an oral agreement. Breaking an agreement occurs when one or both parties determine the contract is no longer necessary. When this happens, you must follow the original agreement's guidelines. Additionally, a new agreement explaining the termination supersedes the original agreement when all parties concur.

Instructions

Written Agreements

1. Read the original written agreement. The agreement should indicate the offer, acceptance and considerations, including the terms for terminating or breaking it. Generally, it's located in the body of the contract under "Termination" or a similar section.

2. Follow the guidelines set forth in the original agreement for terminating the contract. For instance, a cell phone company generally requires a fee for breaking a contract. In this case, pay the fee required if necessary. Other contracts, such as real estate agreements, require a written notice for termination.

3. Compose a written notice, or new agreement, stating the reason for breaking the original agreement. Include the new effective date and the name and address of each party involved. In the body, state the old and new terms, the reason for breaking the contract, and any other implications or considerations. Place a signature and date line for each party on the notice.

4. Sign and date the new agreement. Each person included in the agreement must do this for legal consideration. Additionally, have the agreement notarized to ensure the document is authentic, as stated by the Federal Trade Commission.

Verbal Agreements

1. Identify the terms of the verbal agreement. As with any agreement, there must be an offer, acceptance and considerations for it to be a legally binding agreement or contract. If you are unsure of the terms, contact the parties involved and discuss them if possible. Write the terms as agreed upon verbally for your own reference.

2. Compose a new agreement ending the previous agreement stating the reasons you wish to end it. Include the effective date, the name and address of each party involved, the terms of the new agreement, or reasons you are breaking the old agreement, and a signature and date line for each party involved. Break down the body, or terms, into paragraphs or sections, such as "Original Terms," "New Terms" and "Additional Considerations." Also, include the notary signature line and date on the new agreement as well.

3. Deliver the agreement to each party involved. Use certified mail or a delivery service. Since it is more difficult to verify the information of a verbal agreement, retain proof of delivery.

4. Sign and date the agreement in front of the notary if all parties agree. In the event the other party does not agree with the new terms, a court case is often necessary to determine which party is correct.

Tips & Warnings

• Read any contract thoroughly before agreeing to it, particularly a contract breaking an agreement.

• Contact an attorney if the original agreement does not provide an exit clause or if the other party refuses to agree. Breaking an agreement without the agreement of all parties or a court order may result in severe legal consequences.

References

• Law Library: Contract Law -- Interpretation of Contracts
• CNET News: AT&T's New Early-Termination Fee for the iPhone: $325
• Federal Trade Commission: The Role of Notaries in Deterring and Detecting Fraud and Identity Crimes
• Online Lawyer Source: Verbal Contract Information
• Department of Agricultural Economics, University of Missouri-Columbia; Verbal Farm Rental Agreements Under Missouri Law