Can a business cancel a contract if the unfair contract price is causing it to lose money?

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Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

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UPDATED: Nov 1, 2011

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That will depend on the specific terms of the contract and any factual basis you have for canceling the contract. If the other side has breached its part of the bargain by not providing what it promised, you may be able to either cancel the contract or sue for damages in the amount that you lost due to the breach of the other party.

There are other circumstances under which you may be able to have the contract discharged, but this is very difficult. The doctrine of discharge by impracticability provides that a contract may be discharged by a court if, due to circumstances that were unforeseeable to either party at the time of formation of the contract, completion of the contract would be extremely expensive or difficult to perform. If circumstances such as this apply in your situation, speak to a lawyer to determine if you may be able to have your contract discharged.

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