• Contracts may be terminated for a variety of reasons.contract 20309 image by pablo from Fotolia.com
  
  Contracts are a legal way of spelling out precisely what one party agrees to do for another in any kind of situation. Contracts may also be terminated for a variety of reasons, depending on the situations that may arise throughout the term of the agreement. Some reasons are more common than others.
  
  

Breach

• A breach of contract is one reason for its termination. A breach of contract basically means that one party broke the rules of the agreement. For instance, let's say that a contract was drawn up between a debtor and a bank for a car loan whereby the debtor agrees to pay a certain amount of money every month. The debtor either can't or won't pay, which means that he's breaking his part of the contractual obligation. Though the debtor and the bank might work something out, this is considered to be a breach of contract.
  
  

Completion

• Once a contract is completed, it is essentially terminated because all obligations have been met. This type of contract is a shorter term contract for the most part. For instance, say that a publisher contracted an author to write three romance novels in the next four years. If the author writes those three books, and the publisher pays the author as promised, then both sides have fulfilled their end of the contract. As such, the contract is terminated because it has come to a legitimate close.
  
  

Impossible To Fulfill Terms

• A contract may also be terminated if it's impossible to perform the duties that have been specified. Let's say, for instance, that a football player was contracted to play the game for two years, and he develops a potentially deadly physical condition. Since it's impossible for him to fulfill the terms of the contract, it may be terminated.