Termination of a contract: how to exit an unfavourable agreement

You signed a contract, and now you realise: the terms are unfavourable, the service is not being provided, or the result is not what you expected. A familiar situation for many in Almaty: the contract is signed, money or obligations have already started moving, and you have to look for a way out after the fact. Termination of a contract is a process where haste and wrong steps can be costly.

Common mistakes are simply to stop paying or performing obligations, to notify the counterparty orally, or to fail to keep the correspondence. The result, instead of termination, is delay, a penalty or a counterclaim. To avoid this, it is important to determine straight away the legal nature of the contract, the applicable grounds and the procedure.

Termination of a contract with a lawyer: when the agreement has not lived up to expectations

An agreement with a lawyer is concluded to protect interests in a dispute, a transaction or a criminal case. But circumstances change: the case is settled amicably, a party develops its own view of strategy, and sometimes the scope of work turns out to be less than expected. In such cases, termination of a contract with a lawyer is an ordinary legal situation, not a scandal. It is a way to bring the relationship into line with changed plans, and the law allows such a step.

Most often, an agreement is terminated when:

• the purpose has changed — the dispute has been settled or the subject of the engagement has fallen away;
• a party wants to handle the case independently or change counsel;
• the terms of cooperation no longer suit — the working arrangements, the scope of involvement;
• doubts have arisen about the agreed strategy or the allocation of tasks.

Reviewing termination terms before signing a contract: what to look at

Before signing a contract, check the termination clauses: the notice period, the amount of compensation and the procedure for returning documents. If notice must be given a month in advance and compensation is tied to the total sum, exiting may cost more than the deal itself.

Look at how originals are returned: if documents stay with the counterparty until full payment, you lose leverage. Pay attention to the terms on penalties for early withdrawal and on how what has already been received is set off.

Separately check who records the termination and how: if the contract requires written notice to a specific address or through a specific channel, an ordinary message in a messenger will not work. Clarify what counts as the moment of termination — sending the letter or receiving it.

• Notice period: too long a period keeps you tied to the contract.
• Compensation: its amount and what it is calculated from.
• Return of documents: deadlines and liability for withholding them.
• Penalties for withdrawal: when they are disproportionate.
• Payment arrangements: what you return and when.

Termination of a contract by agreement of the parties: a fast route without court

A peaceful end to obligations is possible as long as both parties are ready to seek a compromise. First discuss the terms: from what date the contract is considered terminated, who returns what, and how payments are settled. Then formalise the termination agreement in the same form as the contract itself, as required by Article 402 of the Civil Code of the Republic of Kazakhstan: if the contract was certified by a notary, the agreement is also certified by a notary. Set out the same terms in the agreement and separately record that there are no mutual claims between the parties. The document is signed by both parties, and each keeps their own copy; that copy will be the evidence if the other party changes their mind.

Oral agreements on termination do not work: if the partner claims they signed nothing and the obligations continue, it will be impossible to prove otherwise. That is why any discussion ends with a signature on paper. Lawyers, advocates and notaries help to check how termination of the contract will affect assets and debts and to prepare the necessary documents. Important steps:

• record the date of termination and the fate of what has already been performed
• describe the return of property, documents or money
• state that there are no mutual claims
• sign both copies and exchange them

Termination of a contract through court: grounds and evidence

When agreement between the parties cannot be reached, the dispute goes to court. But you can apply there only after the other party has refused the proposal to terminate the contract or has not responded to it: under Article 402 of the Civil Code of the Republic of Kazakhstan, a response is awaited within the period specified in the proposal itself, and if none is specified — thirty days. The court does not replace negotiations: it checks whether there was a breach of the contract terms and whether it was material. In a claim, termination of a contract requires support in facts: delay in payment or delivery, incomplete performance, refusal to carry out the agreed works.

You gather the evidence yourself: the contract with annexes and specifications, acts, invoices, correspondence in messengers, emails. The court assesses the whole chain of conduct. If the correspondence confirms the claims and performance did not take place, the position looks convincing.

• Written claims and responses to them
• Reconciliation statements and debt calculations
• Screenshots of correspondence with dates and participants
• Payment documents and bank statements

Unilateral withdrawal from a contract and the consequences for the parties

Unilateral withdrawal — exiting a contract without court: a written notice to the counterparty is sufficient, which under Article 404 of the Civil Code of the Republic of Kazakhstan is sent no later than one month in advance, unless the Code, other laws or the contract itself set a different period. The right arises if it is expressly provided for in the contract or permitted by law for your type of transaction. Where the contract allows withdrawal at any time with prior notice, no court is needed — you notify the party and record the date on which the obligations terminate. In other cases, the ground is a material breach by the other party or a direct provision of law.

Withdrawal does not cancel the obligation to settle for what has already been performed: completed work, delivered goods and services rendered must be paid for, otherwise the counterparty will recover the debt through court and pass the judgment to a court enforcement officer. It is therefore important to determine correctly the moment when the obligations terminate and to close the accounts: sign a reconciliation statement, return any unearned advance and hand over the result. Keep proof that the notice was sent and the documents confirming performance.

• The right of withdrawal is provided for in the contract or follows directly from law
• The notice is sent in writing and delivered to the counterparty
• The date on which the obligations terminate is determined by the contract or by law
• Settlements for what has been performed are closed by a reconciliation statement and return of the advance
• Evidence that the notice was sent is kept in case of a dispute

Comparison of out-of-court and court termination of a contract

The out-of-court route is suitable when the counterparty is prepared to discuss terms: you sign a termination agreement or send a notice of unilateral withdrawal, if the right to it is set out in the contract or in law. The dispute then does not reach the court, but it is important to record in writing the date on which the obligations terminate and the procedure for settlements. If the other party stays silent, avoids signing or continues to demand performance, the amicable scenario stalls and the matter has to be resolved through court.

The main difference lies in how the burden of proof is allocated and in the risks. In court you will have to prove the ground for termination, that the notice was sent, and the existence of a material breach or other circumstances, and the judgment will not take effect immediately. The out-of-court option is quicker and calmer, but depends on the counterparty's goodwill.

A table helps to compare the options.

The choice depends on the counterparty's willingness to negotiate.

Documents and mistakes when terminating a contract

Before writing the notice, gather the evidence: the contract itself with all supplementary agreements, correspondence (including messengers), payment documents — receipts, statements, cheques, as well as signed acts of completed work. If the acts are unsigned or signed with reservations, this will affect how performance is counted and from what moment the contract is terminated.

Three mistakes cost the most: missing the notice deadline, the absence of written confirmation that the refusal was sent, and continuing to use the service after termination. Oral agreements are not enough — written evidence is needed, otherwise the counterparty will claim it never received the notice and will demand payment for the period after termination.

Keep the originals and copies: the court and the enforcement officer work with documents, not with recollections.

Before terminating performance, check the text of the contract: it often states directly how and in what form a party may withdraw from the agreement. Ignoring this procedure turns exit from the contract into a new dispute.