Getting out of a Contract

 

Executed a contract and then immediately realize it wasn’t the best idea?

Bankruptcy may be a solution to that executed contract.

In bankruptcy, a Debtor can assume (keep) or reject an executor contract. An executory contract is defined as a contract where upon filing of the bankruptcy, both parties have unperformed obligations such that the failure of one to perform is considered a breach of the contract.

Business Contracts

For example, in the context of a business, you enter into an agreement to sell your business to someone in exchange for a purchase price. You later decide you can obtain a better purchase price. You can file bankruptcy and refuse to transfer the business to the buyer. Since a refusal to transfer is a breach of the contract, this contract is executor and you can reject it with a bankruptcy.

Personal Contract

Executory contracts can also exist in the personal realm. For example, a rental lease or car lease is an executor contract. If you have one of these, you can reject them upon the filing of bankruptcy.

If you feel you have a contract you entered into that is a mistake, contact us to discuss whether it is possible to reject it.

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