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Mutual Termination of Contract

Both the parties mentioned in a contract have the right to terminate it by mutual agreement. If the parties are no longer to be trusted or the operations have been ceased, then they can terminate the agreement in writing through a document known as the mutual termination of contract.

With decades of experience in drafting agreements, our lawyers and legal consultants in Dubai provide legal drafting services for different kinds of termination agreements, including, but not limited to:

  • Mutual termination of service agreement: A termination of service contract can be initiated according to the terms of the contract originally signed. It is considered as a breach of contract or a broken contract. The statutory law provides consumers with their right to cancel service contracts when certain circumstances apply. if you need help with the termination of a service contract, you can contact our legal team to draft a notice for the cancellation.
  • Non-renewal of work contract: this is a kind of notice given to another party informing about the non renewal of a service contract. When the parties do not wish to renew the contract, they can send a notice of non renewal.
  • Contract termination letter: this is a formal notice of termination and a declaration for non continuation of a contract.
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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.

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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.