Termination of the contract for justified reason is possible if the continuation of the contract becomes unbearable for the parties. It is regulated in TBK articles 126-128.
What is Just Cause?
Any serious facts that make the continuation of the contract intolerable (violation of one of the parties, change of conditions, etc.).
Continuous vs. Sudden Contracts
Continuous Performance Contracts (Lease, Work, Power of Attorney)
Termination with prospective effect for justified reason (TBK art. 126).
Immediate Action Contracts (Sale, Donation)
Due to the structure of the contract, termination usually results in a retroactive return (reinstatement).
Typical Justified Reasons
- Gross violation by the other party
- Continuous failure to pay
- Violation of the obligation to cooperate
- Failure of the purpose of the contract
- Loss of mutual trust
Supreme Court HGK Approach
The Supreme Court of Appeals HGK emphasizes that the justified reason must be evaluated as "objective" and that the subjective discomfort of one of the parties will not be sufficient. An important intolerability condition is required.
Compensation
The party who creates the just cause covers the damages suffered by the other (TBK art. 112 et seq.).
Law of obligations lawyer support is recommended.