It was held that, in order to terminate a binding contract, the applicant seeking termination should not have neglected the obligations of his part of the contract and that the breach by the respondent must be due to negligence rather than not exercising a right. This is consistent with Article 243, paragraph 2, of the BGB, which states that each contracting party does what compelled it to do. Commercial contracts often contain explicit termination clauses that, in certain circumstances, provide for termination, including in cases of an infringement other than a breach of refusal. Certain contractual termination clauses operate by expressly characterizing them as conditions or guarantees, in order to clarify the circumstances in which the contract may be terminated and those that justify only a right to compensation. Some provisions of the treaty seek to grant termination rights for “essential” or “substantial” offences, “minor” offences or repeated offences. Contractual termination rights are in addition to the termination rights of the common law, unless they are expressly (or implicitly) excluded17 by providing that the contract can only be terminated by the exercise of contractual rights. The termination clauses require careful drafting and consideration should be given to the way the courts approach these provisions. Most commercial contracts are written and the contract often contains a specific termination clause that outlines the steps to be taken to terminate the contract and the reasons given by the terminating party. If the contract confers an explicit right of contractual termination, it is extremely important that the terminater follows the procedure set out in the contract. A typical commercial lease is a complex legal document, usually written and negotiated by business lawyers. It would be expected that both parties would make it difficult for the other party to terminate the lease prematurely. If you wait too long, you risk losing your right to terminate the contract, depending on whether you terminate the contract or the common law.
If you terminate termination clauses in the contract, you should respect the terms of the contract. If you terminate the contract in accord with the principles of the common law, as soon as you become aware of the infringement, you generally have a reasonable period of time to investigate the breach and decide whether you terminate or validate the contract. The case law states that if you do nothing too long, you can be considered confirmed the contract, but the length of reasonable time is a matter of fact and may vary from case to case. It is therefore best to seek legal advice on whether you can and should delay a decision to terminate the contract. Each of the following reasons is a breach of contract in accordance with the refusal that justifies early termination under the Common Law: No matter what it is if you wish to terminate your commercial lease prematurely, it is wise for a responsible business owner to consult a business lawyer before you even take the first step.