Mutual Termination of Contract

How HHS Lawyers can help in Termination Contracts of Clients

The firm has helped ensure termination contracts of clients are valid by incorporating the key contract provisions, which are as follows:

The involved parties

With the drafting of a termination agreement, our legal drafting team provides clear descriptions of parties involved, as well as who are going to be bound by the new contract. It is necessary to ensure all parties are tied by identifying them by name, as members of classes, or as falling within particular descriptions.

The relationship between the contractual parties

This section provides the relation of the parties mentioned in the contract and legal relation between each party.

The result(s) of the termination

This clause provides the result to the termination of a contract. This may be in the form of payment, but it usually will depend upon the parties involved.

Any consequences arising from the termination

Under this section, there may be some damages that need compensation to be paid by the defaulting party for terminating the contract before the fixed period set in the original contract. This covers all the consequences faced by either party’s termination of a contract.

FAQ’s

What are the possible reasons considered valid for termination of contract?

Some of the basic reasons for contract termination are as follows:

Contract is made on fraud and misrepresentation.
When one of the parties is mistaken in one or a couple of terms in the contract, it can sometimes be terminated then rewritten.

What makes a contract null and void?

A contract becomes null and void for the some of the reasons as mentioned below:

When the terms and conditions of the agreement are illegal or against public policy
When the party to the contract was not of sound mind while signing the agreement

Take note: a contract may be terminated without an agreement for mutual termination of contract if the other party already has a written contract that lays out the specific reasons in which a contract may be terminated.

What's an agreement for mutual termination?

As mentioned in the article, a mutual termination of contract agreement covers the situation wherein the employee and employer both consent in separation. This is often a document drafted upon the end of an agreement, when a party has been forced to resign, or upon retirement. It is best to have a lawyer draft the agreement to ensure both parties do not face legal risks in the future.

Is dismissal the same as firing?

Dismissal is also known as sacking or firing. It is the term that is used by employers to cease the provision of services by an employee. This means dismissal is the same as firing. To be laid off or dismissed is the decision of an employer. If you are considering of firing an employee, we suggest you hire a lawyer to review the employment contract.

What is termination of a contract mutually?

The termination of a contract by the consent of all the parties is termed as mutual termination of a contract where the contract is terminated in advance of its completion date. Unlike a situation where one of the parties in the contract violated the agreement, the two parties agree to end the agreement and pay any outstanding liabilities on a mutual agreement.

Is joint dismissal accepted in the UAE?

Yes, the mutual termination is legally admitted in the UAE contract law. In case both sides are willing to end the contract and both are willing to sign an agreement in writing, the agreement may be disposed of legally without it being seen as a breach.

Under what circumstances is a mutual agreement in terminating a contract?

Termination of a contract may occur at any point if the involved parties are willing to terminate the contractual relationship. This can be as a result of business restructuring, circumstances changes, financial reasons or satisfying the goals earlier than anticipated.

What do we need in mutual termination agreement?

The mutual termination agreement is usually provided with the information about the names of the involved parties, the reference to the initial contract, the specified date of termination, the settlement of payments or liabilities, the parties need not disclose the information, and the signatures of all the parties that confirm their agreement.

Is termination of employment contracts in the UAE possible through mutual agreement?

Yes employment agreement can be ended through the mutual agreement between employer and employee. The termination contract must explicitly specify the how to settle the salary, end-of-service benefits, and unused leaves among other entitlements given to the employee by the employer in such instances.

Is the termination agreement that is signed by both parties?

Yes, the termination by mutual agreement will entail the consent and signatures of both parties to the initial agreement. The termination can not be lawful without consent by all parties involved in writing.

Are mutual termination agreements notarized?

Termination agreements are not always to be notarized. Nevertheless, there are some contracts in which notarization may be necessary in accordance with the regulations, e.g. corporate agreements, contracts that are related to property or the power of attorney.

Will mutual termination agreement help in avoiding future disputes?

Yes, a well-written mutual termination agreement would help to minimize the potential impact of future controversy as it clearly states the duties of each side and the settlement of the obligations, as well as conditions that are still applicable after the termination.

What becomes of obligations on termination of the contract?

There are more obligations that may be retained despite the termination based on the conditions signed by the parties. It can be a confidentiality, payment, intellectual right or dispute resolution agreements.

Why is it advisable to have a legal advice to write a termination agreement?

The legal professionals will make sure that the agreement of termination is in compliance with the UAE law, and that it will protect the interests of the two parties, and that liabilities, payments, and responsibilities are clearly defined to avert any legal disputes in the future.