Mgr. ANNA VEJMELKOVÁ, advokát

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How to Terminate a Contract for Work – Options for Both Parties

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Sometimes, things just don’t work out.
A contract was signed, the project began – and yet, something’s wrong. The contractor is late, or the client stopped paying, or trust has vanished.
That’s when one of the toughest questions comes up:
👉 “Can we terminate the contract, and how?”
The answer isn’t always easy – but knowing your rights in advance can save you a great deal of trouble.

In Czech law, a contract for work is governed by Sections 2586 et seq. of the Civil Code. Terminating such a contract can be tricky – especially since each party has different rights and duties.

🛑 Withdrawal from contract

Withdrawal cancels the contract from the beginning. It’s possible if:

  • the other party has breached a material obligation,

  • a specific situation for withdrawal is contractually agreed, or

  • the law explicitly permits it.

However, withdrawal requires full settlement – including refunds of any payments or completed works.

🧾 Termination (notice)

Unlike withdrawal, termination ends the contract only going forward. It’s typical for long-term or framework contracts, but rare in work contracts unless explicitly included.
Under Czech law, a client can withdraw even without cause, but must compensate for incurred costs and lost profit (Section 2589 CC).

This rule often causes disputes when overlooked.

⚖️ Termination by agreement

The most peaceful solution: both parties agree to end the contract.
This allows customization of consequences – like partial payments, delivery of completed work, and final deadlines.

This type of agreement lowers the risk of future litigation – but requires full mutual consent.

📌 What to include in the contract

To avoid problems later, always include:

  • clear grounds and procedure for withdrawal,

  • details on cost coverage and refunds,

  • deadlines for notices,

  • optional notice clause if the project is long-term.

Facing a difficult contract termination? Or want to draft a contract that includes safe exit options?
🔹 Legal consultation from CZK 3,500 excl. VAT
🔹 Tailored help with Czech and international clients

👉 Get in touch and let’s resolve it properly.

Contact a legal professional – I specialize in contract law.
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