The answer: when there is a notice provision in the contract allowing one or either party to terminate the contract before expiry of the fixed term. This is actually quite common – for example a 12 months fixed term contract at face value suggests it will last for 12 months. However, if it is terminable by either party on three months notice at any time and one party gives so notice, it might not last for 12 months so the so called fixed term is not so fixed after all.