Contractors' Questions: How to terminate my contract without a fuss?

Contractor’s Question: I’m trying to terminate my contract without conflict or challenge. On 26th Nov 2015, I was told the contract would “automatically renew” on 12th Jan 2016 unless I notified them otherwise three months before. But nowhere in the contract does it say that they have to give me three months’ prior notice to terminate me.

It does say in ‘Sub Section A’ that the Maintenance Agreement will be for an initial minimum term of 12 months. The contract was signed on 12th Jan 2015, meaning the initial minimum term expires on 12th Jan 2016. When 12th Jan arrives, will I have fulfilled my legal obligation and contractual requirement of the initial minimum term?

The contract states: “The Maintenance Agreement may be terminated after the initial minimum term by either party giving to the other three calendar months’ notice in writing expiring on the day of the term.” So after 12th Jan, am I permitted to give the company notice to terminate our contract with them accepting that I have to provide three calendar months’ notice in writing informing them of this?

Expert’s Answer: Without having sight of the contract in its entirety it is not possible to provide a definitive response to your query.

However the general position is that the terms of a contract need to be incorporated at the time the contract is agreed. All terms in a signed contract are deemed to be incorporated. This means that if a term is not in the contract, then it cannot be relied upon. Therefore if the company wishes to rely on the clause in question they would need to demonstrate that it has been contained in the written contract and agreed.

With regards to your query relating to Sub Section A of the contract, an initial contract term (minimum contract term) is an interval within which one cannot terminate the contract. Upon expiry of the initial contract period, the contract would not necessarily automatically cease, unless this is stipulated in the contract. It may continue for an indefinite period or alternatively may be extended for periods equal to the initial contract period. The provisions in your contract should stipulate what would happen after the initial minimum term.

In relation to terminating the maintenance agreement after the initial minimum term, it is advisable to again thoroughly check the contract. Note that the three months notice in writing must expire on the day of the term; the contract should define what the “term” is i.e. yearly, monthly etc. It is vital that you determine what the term is, as the notice requirement must be strictly complied with.

Issuing a notice correctly is very important. If not done correctly (e.g. not issuing notice in accordance with the terms) the termination of a contract can have far reaching repercussions and could compromise an otherwise legitimate right to terminate. It may also give rise to a breach of contract claim.

The expert was Fozia Cheychi of Lawdit Solicitors.