From the course: How to Read a Business Contract

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Finding the exit clause within a contract

Finding the exit clause within a contract

From the course: How to Read a Business Contract

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Finding the exit clause within a contract

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- It may sound strange as you enter into a new contract with new opportunities, but understanding how you can exit a contract and how the third party that you are contracting with can exit are crucial, as it helps parties manage potential risks and uncertainties. Knowing how to exit or handle third party exits allow for a smoother transition, minimizes disputes, and provides a clear roadmap in case circumstances change during the contract. It actually helps to protect the interests of all parties involved. Typically, you would look in the section of the contract that deals with the term or duration. that may say something like, "The term of this agreement shall be exactly one year from X date to X date," or, "This agreement shall commence on X date and shall continue through until the completion of the project or cancellation by either party in accordance with clause 2 or clause 10." Remember that whenever you see the words in accordance with or pursuant to, they are signposting you…

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