Legal Question in Business Law in California

Re: Getting out of a contract

I can understand why you would want out of a contract that is not producing. With the amount of information included here it is difficult to say with any certainty if you can "get out of the contract". Each agreement is different and each will provide different termination rights. Your best bet is to review the agreement or have an attorney review the agreement to determine what termination rights you have and what your options are moving forward.

Re: Getting out of a contract

Getting out of your contract depends on several legal issues. There are some that will make it more likely that you can get out of the agreement. I am happy to discuss this with you at your earliest convenience.

JDH

Re: Getting out of a contract

"Can you cancel"? Sure. Is there a risk of being sued? Sure. Hire an attorney to negotiate resolution for you; he can make the right arguments and 'carries weight' you don't. Feel free to contact me if serious about doing so.

Re: Getting out of a contract

Did the company really promise specific results if you advertised in its maps? If not, the fact that it didn't produce results won't be of much help.

Whoever told you that every contract must have an early termination clause was wrong. There is no such requirement.

If the company actually misled you in a material way about what it was going to do you may excused from further performance under the terms of your contract. I don't have enough information to know whether it did or not.

Re: Getting out of a contract

I have read the previous four answers, and don't disagree with anything said. However, none of them really discusses what will happen if you breach the contract and have no defense, i.e., what the map company's damages might be.

The rule of thumb in breach of contract damage awards is that when the non-breaching party is a seller of goods or services, it is entitled to "the benefit of the bargain," i.e., to be placed in a position where it is no worse off (and conversely, no better off) than where it would have been if the contract had been performed.

If the seller is capacity-constrained because it can only make so many widgets a year, or only has one 1928 Bugatti to sell, its lost benefit is how much less it receives from another buyer who takes the place of the defaulting buyer. If the widgets or Bugatti were under contract to X at $100,000, and X defaults, but the seller can sell to Y at $99,000, the seller can only recover $1,000 if and when it sues X.

On the other hand, if the non-defaulting seller can pop out oodles of widgets, but there is a deficiency of buyers, when X defaults there is no Y to take his place, and the seller has lost a sale, net-net result. (If you're in the hotel or airline business, it's like when a guest or passenger doesn't show up and there are lots of standbys or guests who will show up later, versus when the empty room or seat costs you the revenue because you can't fill it before takeoff or the next AM).

Here, the map printer/distributor will argue that it lost a sale on net balance because it had lots of unused capacity to print and distribute maps, and hence it will argue, probably successfully, that it is entitled to the full $6,000 contract price, less only its avoided out-of-pocket costs (probably rather low) from not having to do its part after your breach. Sounds like it would claim around $3,000 - 4,000.

That level of claim would make its case fair game for filing in small claims. A single plaintiff cannot file more than two $2,500-plus suits in Small Claims Court in a year, but if this company is within the limit, I would expect it to sue you for something in the $4,000 area in Small Claims Court after your breach, if you choose to do so.

I've exceeded the character limit - I'll post the conclusion separately, later.

Re: Getting out of a contract

This is the conclusion of my response:

So, you seem to have three choices (if my analysis is correct, of course): (1) Pay the $6,000 and accept the limited benefit; (2) try to negotiate buying your way out of the last two years; or (3) resign yourself to being sued and paying a judgment, which should be well under $6,000 but very possibly in the $4,000 area.

There is nothing morally wrong with breaching a contract. Contract law anticipates that a party may decide not to carry out its obligations. However, there is a cost to the decision to breach. A wise business person will weigh the costs and benefits of breaching versus performing, and decide which way to go based on the probable consequences expected after doing the weighing.

Any views expressed as to damages, outcome, etc. are based on limited facts and application of very general principles. Your results may differ.

Re: Getting out of a contract

I would be happy to look at the contract to determine your options. Contact me directly.