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What is an expiration of a contract?

The expiration of a contract is generally the ending or completion of a contract according to its own terms. For example, a lease agreement simply expires on the date agreed to by the parties and included as a term in the contract.

While contract expiration occurs most commonly by date, it is not the only form of expiration. A contract can also expire based upon the occurrence of an event. For example, a supplier may have a window of time during which to deliver a product to the buyer. The contract might provide that upon making the delivery, the contract will be completed.

Contract drafters sometimes use “expiration” and “termination” interchangeably. Some drafters prefer to use “expiration” to refer to a natural ending of the contract and “termination” to refer to a premature ending of the contract.

Some lawyers believe that expiration is simply a form of termination, and subsumed by it. On the other hand, some attorneys believe that the two terms are completely different. It is important to recognize that the way in which these terms are used has resulted in contractual disputes and litigation. Therefore, contracts should be drafted carefully to avoid ambiguity (and litigation).

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