A deal between you and your client is sealed when both parties sign a written contract. A contract is a binding agreement that has all the details regarding the project. Both the involved parties can alter the requirements and rules before the contract is signed.
It exists to protect both from any wrongdoing. If you feel your customer is not living up to their end of the deal, you can cancel the contract. Walking away from a project without legally terminating the contract could get you in trouble even if it was the customer’s fault!
Let us go over why you would want to cancel the contract and how can you do it.
Why?
Breaching The Terms Of Contract
Just like you, your client is expected to fulfill certain conditions, including payments. You must include these terms in the contract.
Most contractors think that a contract only helps the customer. But you should try to cancel the contract if they repeatedly break the agreed-upon terms.
Issues With Payment
The payment schedule is agreed upon before the start of the project. Usually, it involves an advance and then the rest of the payment.
The best practice is to break down the payments into smaller ones. It makes it easier for the client to pay and for you to keep track of it. You receive these as you complete certain parts of the project. Occasional delays are understandable. But if your customer is behind on multiple payments, you might have to consider ending the contract.
How?
Terminating Clause
It is crucial to legally terminate the contract to avoid problems. If not, your customer can sue you.
While drafting any contract, including a termination clause. This clause has a list of situations where the party can cancel the contract. This clause has two lists, one to protect each participant. We suggest this as the safest way to get out of a contract with little to no repercussions.
Void Contract
If the basis of the contract is flawed in the eyes of law, we can deem it as a void contract. We cannot enforce these in a court of law which means the contract gets canceled.
This comes into play if your customer lies to you about any of the major details of the project. It also includes any illegal activity or if the contract becomes impossible to complete.
Legal Battle
Without the ability to use a termination clause or proving the contract void, you could end up in a legal battle with your client. Another way you could end up in this if you agreed upon a verbal contract. These are impossible to prove and hence difficult to cancel.
We advise avoiding this situation completely. Not only will it take additional time and resources, but your reputation could take a major blow regardless of the result.
Some customers try to exploit your services and pull you into a legal battle. It is because of these reasons that we suggest picking your customers carefully. At times, it is best to turn down a client politely.
We make our blogs at CustomFin so that you can keep your business safe. We also offer easy payment plans to your customers so that you can close more deals.
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