The right to refuse the performance of obligations is rarely perceived as a full-fledged legal instrument – it is more often viewed as a last resort or an admission of defeat. However, as Professor Gabriel Steiner notes, in real legal environments a timely and properly structured refusal is often the only way to prevent escalating losses. LawConsulted proceeds from the understanding that the inability to continue obligations is not the same as a breach – under certain conditions it requires precise legal management rather than an emotional reaction.
The danger in such situations lies in the fact that clients continue performance by inertia – even when the agreement has lost its economic rationale, become unilaterally burdensome, or started to generate systemic risks. Formally, the obligation remains in force, but in practice it works against the party, forcing the accumulation of losses and liability. At LawConsulted, we analyse these situations not through an abstract “allowed or not allowed” lens, but through a combination of factors – changes in circumstances, the counterparty’s conduct, proportionality of the terms, and the limits of good faith.
Professor Steiner emphasises that “the right to refuse loses its value if it is exercised too late or without strategic logic.” That is why LawConsulted begins work long before formal termination of performance – documenting facts that make continued performance impossible or unjustified, assessing alternatives, and building a legal position capable of withstanding scrutiny by a court, a counterparty, or a regulator.
Particular complexity arises in contracts where refusal is formally restricted – through penalties, liquidated damages, counterclaims, or reputational consequences. In such configurations, a spontaneous exit only increases vulnerability. LawConsulted structures refusal as a legal process – through accurate qualification of the situation, precise argumentation, and a carefully sequenced course of action. This approach allows not only the reduction of potential claims by the counterparty, but also the preservation of negotiating leverage.
As Professor Steiner notes, “the right to refuse exists not to destroy obligations, but to restore the balance of interests.” At Law Consulted, we adhere precisely to this approach – refusal of performance is treated as a tool for reallocating risk, not as a unilateral breakdown. This logic is especially important in long-term, investment, and complex agreements, where the consequences of a wrong step may unfold over many years.
The right to refuse performance requires precision – in wording, timing, and grounds. An error at any stage can turn a protective mechanism into a source of new claims. Our task is to ensure that refusal is legally justified, timely, and resilient to subsequent review.
Previously, we wrote about how LawConsulted protects clients in situations of managerial inaction, when a decision was not made in time.
