Let’s say you signed a contract that looked like a good deal at the time, but you want out of it now. This isn’t that rare a situation. Most of us sign many contracts in our lives, and they don’t all turn out to be the best option available. If you’re an independent contractor, you can always walk away at any time, that’s built into the contract, but if you own a business, it’s a lot more complicated.
But it isn’t necessarily impossible. Use these four steps to try to break free from your contract chains and sign that better deal.
- Send a letter and offer to negotiate
This is the first step because it’s a polite gesture. If you’re going to get out of a contract relatively painlessly, you’ll want to try to be polite and business-like. In your letter, offer to negotiate a fair fee for breaking the contract. You might also be able to offer to partially fulfill the contract. Should the other signer of the contract be in a negotiating and amenable mood, you might be able to get free without much pain.
- Use the “cooling off” rule
If you’ve changed your mind within three days of signing your contract, you’re in luck, you are probably allowed to break it. The Federal Trade Commission allows 72 hours to “cool off” after you’ve signed even a modestly sized contract (anything worth more than $25). Use that to your advantage. If a better deal became available right after you signed your contract, break it without consequence and sign the other one.
Still, it’d be best to send a letter, just to be polite.
- Breach the contract and arbitrate
If the letter didn’t work and you waited too long, you can always stop making payments or otherwise delivering on your end of the contract. Most contracts require you to then go to arbitration where you can negotiate a better situation for yourself, again either by paying fees or offering to partially fulfill your end of the deal.
- Talk to a lawyer
Really, if the contract is of any significant size at all, you should probably talk to a lawyer to make sure you are on firm ground with your actions. A contract lawyer will know precisely what you are entitled to do and what you will be penalized for. They can also advise you on what information you should share in breaking a contract and how to make yourself look best in the eyes of the law.
If you are an employee with a contract, you may want to talk to an employment contract attorney to find out what rights you have, whether you are breaking the contract or it was broken on you.
Remember, you are not necessarily stuck with a contract you’ve signed. Though it may be hard to find your way out of a mess you’ve signed yourself into, it is not impossible. Use the steps above, and hopefully, you’ll be free to make that better deal. Try to stick with that one, though. You don’t want to earn a reputation.