In what cases can a contract be terminated unilaterally?

The general cases

• If the other party commits a serious breach. This is termination for breach. It is only possible if the breach defeats the purpose of the contract. In a sale governed by the “Código Civil de Cataluña”, the Catalan Civil Code, notice is enough. In other contracts, too, notice is given in writing. In all of them, if the other party does not accept it, the judge decides whether it was justified.
• If the contract allows it, through a withdrawal or exit clause, or through a withdrawal deposit (“arras penitenciales”), which allows a party to back out by forfeiting what it paid or by returning double. In Catalonia, a deposit is only a withdrawal deposit if this is expressly agreed. The clause must be clear, because the courts interpret it restrictively and, in case of doubt, take the view that it does not allow a party to pull out.
• If the contract has no fixed term. No one can be bound for ever, so either party can bring it to an end, in good faith and with reasonable notice. A party that cuts it off abruptly may have to compensate for the harm caused by the lack of notice.

In exceptional cases, force majeure that prevents performance can extinguish the obligation and an extraordinary change of circumstances can lead the judge to adjust the contract or, as a last resort, to terminate it.

Contracts in which the law allows it

• Commissioning building work. The person who commissions it can withdraw even after it has started, paying the builder for their expenses, their work and the profit they would have made. This rule of the Spanish Civil Code (“Código civil”) also applies in Catalonia.
• Services based on trust, such as those of a lawyer or an adviser. It is generally accepted that the client can dispense with the professional whenever they wish, paying for the work done.
• A mandate, which is an instruction to handle a matter on someone else's behalf. Under the Catalan code, the person who gives the instruction can revoke it at any time by giving notice. The person who receives it can renounce it, but if the instruction was for a fixed period or for a specific matter and they renounce it without good cause, they must pay compensation.
• Consumer purchases made at a distance or away from business premises, for example online or from a salesperson who comes to your home. You can withdraw without giving reasons within fourteen calendar days, subject to exceptions such as made-to-measure products. For services paid for monthly, such as a gym or a phone contract, the business cannot put disproportionate obstacles in the way of cancelling, although an agreed minimum term with proportionate compensation may be valid.
• Residential and commercial tenancies, which have their own rules. For example, a residential tenant can leave after six months by giving thirty days' notice, but the landlord cannot end the tenancy early except in the cases laid down by law.

How to do it

• Notify the other party in writing, by a method that leaves a record, explain the reason and, if the contract has no fixed term, give reasonable notice.
• If the reason is the other party's breach, it is advisable to have asked them in writing beforehand to perform.
• Ending the contract does not wipe out what went before. What has already been done is paid for and anything received for what will not be done is returned.
• If you are not sure that the reason is sufficient, take advice first. If it was not, you become the party in breach.

In most of the rest of Spain the same rules apply, except for sales and mandates, which there are governed by the Spanish Civil Code.