After you move on to the 2nd act, Mizora will come to you during the rest and ask you to save a certain vassal. If you save him, Mizora will agree to break the contract. The vassal is in the 2nd prison (the descent into it will open after the battle with Ketherick Thorm) this vassal turns out to be Mizora herself. We save her and ask her to break the contract, but to no avail, later in Act 3 we will meet her again in the Wyrm Rock, and after talking to her we go to Gortash. After his promotion, we talk to her again and she says she will come to our camp. When she arrives at the camp, she will offer conditions, tell us where Wyll's father is being held, or break the contract.
Choose to break the contract.
spoiler
Credit to HSePa on Steam Community Forums