While obviously parties involved in a contract are legally required to fulfill their contractual duties, under some circumstances, the parties may legally terminate the contract before they fulfill their duties. This act is called Contract Termination.

Contracts can be terminated for a variety of reasons, such as the impossibility of performance or prior agreement. Breach of contract is one of the most common reasons for the termination of a contract. A party may be found in breach of contract if it fails to perform any of the contract terms. For example, failure to deliver the goods or services or failure to pay on time. 

Terminating a Contract

1. Select the Contracts tab at the top of the page. 
2. Click to open the active contract that you want to terminate.
3. Click More  at the top-right corner of the contract details page, then choose Terminate Contract. 
4. Enter the termination details in the Terminate Contract dialog box. If the intent of the contract is to buy or sell, the option to add Financial Details will appear at the bottom of the Terminate Contract dialog box. 
5. Click Add  to enter the amount paid/received and balance to pay/receive in the Amount Paid Till Date or Amount Received Till Date and Balance fields, then click Add.
6. Click Next. The Send Termination Email step will appear, with the email address of the counterparty's primary contact populated in the To field and the Termination Letter attached.
7. Click the Termination Letter to download it. 
8. Check the Add Cc checkbox to copy other people in the termination email. 
9. Enter the Subject and the Message of the email, then click Send. 

The contract will be terminated, and the counterparty's primary contact will receive the termination email.  

Note: 

1. When adding the Financial Details in the Terminate Contract dialog box, if you select the option None for the Balance Amount field and click Add, it will display the gain or loss from the deal in the contract along with the initial and final contract amounts. 

2. Zoho Contracts has built-in templates for a termination letter, renewal letter, extension letter, and amendment letter. An administrator can customize these templates. To learn more, see Customizing Termination Letter.  
   

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Viewing Termination Details

1. Select the Contracts tab at the top of the page. 
2. Click to open the contract in the Terminated state. 
3. Hover over the Information icon . A pop-up will display the termination details.   

Note: When the contract owner schedules the termination for a later date, an alert message will be displayed in the contract details page. Click View Details on the alert to view the termination details.