When a business is unsatisfied with the services it is receiving under a contract, it can sometimes be tempting to stop paying for those services and end the relationship immediately. Most written contracts, however, have some provision for how the termination of the contract must be addressed. Often, contracts require that the other party be given a chance to cure any problems before the contract can be properly terminated. A business that tries to end a relationship without properly terminating the agreement pursuant to its terms may be in breach of the contract.
The termination of a contract was at issue in motions for summary judgment in the case of Big E Trailers, Inc., v. The Ohio Andersons, Inc. In 2011, the plaintiff and the defendant entered into a four-year contract for the plaintiff to provide maintenance of the defendant’s trailers for a flat rate of $325 per month for each trailer in the fleet. The parties had a previous agreement that required the plaintiff to replace some of the plastic tanks with fiberglass tanks, but that requirement was not in the 2011 contract. There was evidence that the plaintiff installed some fiberglass tanks after the end of the previous agreement.
In 2014, the defendant notified the plaintiff that it was terminating the contract. The plaintiff filed suit several months later, alleging the defendant had not properly terminated the agreement and had breached it by not making monthly payments. The defendant counterclaimed, alleging the plaintiff had failed to perform tasks under the agreement. Both parties sought summary judgment.