The types of contract termination and their effects

Abstract

Termination of the contract means the penalty that results from the failure of one of the contracting parties to implement the obligations that he pledged in the contracts binding on both parties, while the other contracting party who requested the termination is ready to implement those obligations. Thus, this study aims to clarify the nature of the obligations that the other contracting party requesting the termination may breach, and the legal texts provided by the civil legislator that limit the creditor’s arbitrariness in using his right to terminate. Since the termination of the contract is based on the idea of ​​the link between the reciprocal obligations in the contracts binding on both parties, the nature of these contracts requires that one of the contracting parties be bound by the obligation of the other contracting party. It is fair that if one of the contracting parties does not implement the obligation that he pledged, the other contracting party may be released from the obligations that he pledged and to claim compensation. This release is by terminating the contract. Therefore, terminating the contract means dissolving it and stripping it of its binding force, as a penalty. Since terminating only applies to contracts binding on both parties, Therefore, unilaterally binding contracts cannot be rescinded, due to the absence of reciprocal obligations between the contracting parties. Since rescission is originally decided by a judicial ruling, as long as its conditions are met in accordance with its discretionary authority in this regard, it may also occur by force of law without the need for a judicial ruling to create it, if the contracting parties agree to obtain it in this manner. Accordingly, rescission is divided, in relation to the manner in which it occurs, into judicial and consensual rescission and rescission by virtue of the law. As for the effect that results from rescinding the contract between the contracting parties, it is the elimination of the ruling of the contract with respect to the past and the future. If the contract is rescinded, it is considered as if it did not exist, and it results in the removal of all effect and the return of the contracting parties to the state they were in before the contract, and this is what we will discuss in the research in succession.