How Do I Get Out Of A Contract I Wish I’d Never Signed?
by Caldwell Martin Cox | 19 12, 2022 | Latest News
You signed a contract, but things aren’t working out. Maybe the services you signed up to haven’t met your expectations. You’ve found a better deal, or you’ve realised that you just can’t work constructively with the other person. It happens. What can you do to get out of the contract.
Are you legally bound by the contract?
You may not be legally bound to the contract because the contract has not yet been fully formed. For example, the contract might not yet have been signed by the other party, or there may be some key terms that you have not yet agreed on.
Some contracts will not be binding until the parties do certain things or provide certain information. For example, the landlord of a commercial retail property must provide the tenant with a disclosure statement before a commercial retail lease is binding on the tenant. There are similar laws that also apply to franchise agreements.
Is there a ‘cooling off’ period?
For some contracts, a cooling off period is mandatory so you may be entitled to cancel the contract within a certain time-frame even if this is not specifically stated in the written contract. This applies to franchise agreements and some contracts for the purchase of a property.
If you are unsure whether you are bound by your contract, it is important to get legal advice as soon as possible or you may miss the opportunity to stop the contract before it is fully formed or use any cooling off periods that may apply.
You may still have options to get out of the contract even if the contract is fully formed and any cooling off period has expired.
Can you negotiate your way out?
You may not be the only one regretting your decision to enter into the contract. The other party may feel the same. Sometimes it is very helpful to have an early and honest conversation with the other party to explore how you may both be able to happily walk away from the contract.
The conversation can be positive and doesn’t need to be unpleasant but you should get legal advice before having it. You should also continue to comply with your side of the contract until both you and the other party have agreed and fully documented the basis on which you are both prepared to cancel the contract.
Is the other party in default?
In simple terms, a contract is a set of rules that each party must abide by when dealing with each other. If one party isn’t playing by the rules, then most written contracts will allow the innocent party to take steps to bring the relationship to an end.
Unfair Contract Terms?
The Australian Consumer Law (ACL) protects consumers and small businesses from contract terms that are unfair. If your contract is very one-sided and allows the other party to:
• Limit their obligations under the contract;
• Bring the contract to an end;
• Take action against you if you don’t comply with the contract; or
• Change the contract,
but doesn’t give you the same rights, then it is possible that the ACL can step in to override or invalidate those terms.
Knowledge is Power – and the best way of avoiding this situation is of course to get the right advice BEFORE you enter into a contract. If it is too late for that there may be other options. Either way, our Property Team are well equipped to help.