Discuss the termination of contract

Termination of contract is an act occurring when the two parties break an agreement which was set between them showing relationship that they have either socially or economically meaning that there was agreement of provision of services from both parties to each other and now they decide that the will do that no more, example if G was giving services to F under certain terms or agreements or condition which was guiding both parties for certain amount of time and then they both come to understanding to each other that they will not work together as from that time or terms that were there making them to have a relationship will be active to them no more making them free from the agreement that they had to each other and also meaning that no one will any longer be responsible to another. Also termination of contract it means that the agreement that was between the parties is no more recognized between the parties.

Contract Law

A contract is an agreement (usually between two parties or more) giving rise to obligations on the part of both parties which are enforced or recognized by law. Contract is agreement which is considered to be done by two parties when one part seems to be insufficient of goods or services and there fore requires assistance. Not only that but contract shows relationship between two parties that are intermingled to one another meaning that one part is doing one thing for the favor of another part or both of them are doing things for the benefit of themselves example X is giving services to Y without wanting return back from X, or X is giving services to Y with intention of getting some payment from Y, or sometimes it can happen that X is giving services to Y and also Y is also providing some services to X meaning that there is exchange of services in between the parties and that can take too long or short time.

1. Termination of a contract takes pace when the parties to the contract are released from their contractual obligations. Contract termination may take in a number of ways which are:

By breach of contract.

By agreement between the parties

By performance of the party's contractual obligations

By frustration.

By inability to perform

By fraud

1. By breach of Contract

A breach of contract takes place when a party fails to deliver on their contractual promises by failing to perform their obligations completely. A party may do so by:

in the event that the party has not performed, by stating that they do not intend to perform

not performing their obligations or

where the performance is defective (for instance, poor workmanship)

An anticipatory breach of contract takes place where a party evidences an intention (either expressly or impliedly) that they no longer consider themselves bound by the contract. In such a party the innocent party may elect to affirm the contract and sue for damages for the breach, or accept the repudiation of the contract and terminate the contract.

 2. by Agreement

Contracts may be terminated by agreement where the contract itself provides for the event (for instance upon 3 months' notice); by the parties conduct; or where the parties enter into a separate agreement to terminate the earlier agreement (for example, a compromise agreement where there has been a dispute in respect to the earlier agreement).

3. Termination by Performance

A contract may also be terminated by performance of the parties' obligations. Discharge of a contract in this way takes place when performance of the contract is complete and exact, with reference to the terms of the contract. However, discharge may also place where the contract is divisible; is capable of being fulfilled by substantial performance; the other party has prevented performance; or where partial performance has been accepted by the other party.

 4. by Frustration

Frustration is a basis upon which parties may be excused from their obligations to perform as a result of events arising after the contract has been entered. Frustration may be the result of the destruction of the subject matter of the contract; government interference, where performance becomes illegal; a particular event which is the sole reason for the contract fails to take place; the commercial purpose of the contract is defeated; or where a party dies. When a contract is terminated by frustration, money paid pursuant to the agreement is recoverable, and expenses may be offset against moneys paid.

5. by Inability to Perform

A contract can be terminated when something unforeseeable occurs that prevents the parties from following through with the contract. This situation is referred to as "impossibility of performance." For example, parties can agree to the sale of a house from one party to another party. Thereafter, the house burns down. As a result, the parties cannot continue with the real estate transaction contained in the contract and thus, the contract is terminated.

6. by Fraud

A contract can be terminated by what is referred to as "fraud in the inducement." Fraud in the inducement occurs where a party intentionally misleads the other party into entering the contract. For example, a party lies about the subject of the contract and the other party relies upon the statement and agrees to the contract. This misleading action can terminate the contract.

Remedies for Contract Termination

If a contract has been terminated, a party has legal recourse against the party in breach of the contract. At this point, one should review the contract to check whether there are any notice requirements wherein one must notify the breaching party as a prerequisite to filing any claims or suits. The aggrieved party may file a law suit in civil court where the party may seek, among other items, monetary damages. In such a case, one should consult an attorney in order to review what rights one has in pursuing legal action.

And so from the above points we can see that there are some of the reasons that can make the contract to be terminated as analyzed on the upper section. But also we have seen that there are remedies or compensation that has to be made in case there two parties are pulling away from the contract and one of them is being damaged or caused loss and the other part has to pay.

From here there goes the second question about the invitation of treaty and pharmaceutical case

Definition of an invitation to treat and the pharmaceutical case.

An invitation to treat is said to be a statement made by one person asking the other to make the first person an offer. An invitation to treat is sometimes described as 'an offer to make an offer'. This is not a very helpful way of describing an invitation to treat. If a proposition is made by one person with the intention that if the other party accepts that proposition there will then be a contract between them, then that proposition is an offer. If a proposition is made by one person with the intention that if the other party accepts that proposition there will not be a contract between them at that stage, then that proposition is an invitation to treat.

Examples of invitation to treat:

In the examples of invitations to treat that follow, consider carefully what proposition or factual situation made the court decide that it was an invitation to treat and not an offer.

Carefully identify the particular elements of the facts of the cases that persuaded the courts that what was intended by one of the parties was an invitation to treat and not an offer.

Pharmaceutical Society of Great Britain v Boots Cash Chemists Ltd (1953) Certain brand name medicines were displayed for sale in a self service store. The issue arose as to when and where the sale of the medicines took place. Was it when a customer put the medicines in her shopping basket or was it when she presented the goods to the cashier? The reason this was an important issue was because the Pharmacy and Poisons Act 1933 s.18 (1) provided that it was unlawful to sell such medicines unless the sale is affected by, or under the supervision of, a registered pharmacist. If the sale took place when the customer put the medicines in her shopping basket the sale would not take place under the supervision of, a registered pharmacist because no pharmacist was present at that time. If, on the other hand, the sale took place when the customer presented the goods to the cashier the sale would take place under the supervision of, a registered pharmacist because a pharmacist was present at the checkout desk.


Then from the above case we can see that the goods that were not allowed to be sold due to the effect that they had to the human beings got soled to one of the customers in the super market from the case the super market owner is liable for the mistake that he did of putting the medicine that was not supposed to be sold. And also from that we can see that the super market owner has to be careful with the goods that he or she is selling so as to avoid unnecessary damages. From the above case we can see that the company is not liable due to the reason that the super market owner was responsible to know the kinds of goods that are delivered in the supermarket and also has to ensure the kinds of goods being sold to the people have no effect and they are secured. From this I mean that it was better for super market owner to prevent the damage to the customer by making sure all goods sold in the shop are good but in the other hand also the company making the goods is liable for making the products that have affects to people



G.brown et al, (1993) business law with ucc application 8th, (ed).Mc Grawhill. New York

Miller.L.R, (2006) Business law today, 7th (ed), United States, Thomson

Tanzanian Law Report (1985) published through IDA,(R2413TA) Tanzanian Law Report Board










Laws on Contract Termination


There are several ways to terminate a contract. This article provides an overview of the ways in which a contract may be terminated, describes termination issues and provides...