Contract termination letters are necessary for communication with your vendor so you can terminate your agreement in a civilized way. You may be trying to dissolve a relationship with a vendor, 1099 contractor, or even your landlord but when writ
ing a business contract termination letter there are a few things to include so that everyone involved understands the details of the termination. This will reduce future problems and help to maintain the relationship with your business partner.
Before Creating The Contract Termination Letter
Before entering into an ongoing contract be sure that all parties understand the termination process. Normally in business each party can either terminate their agreement with out notice or terminate the agreement with a 30 day notice. This is important to clarify in writing before entering into the agreement.
Contract Termination Sample Reason
Writing the Contract Termination Letter
Everyone has a different style and tone to their contract termination letters but after writing over a thousand contract termination letters there are some things that you may want to include for sure. These include:
- Who are you are terminating the agreement with.
- The part in the terms and conditions that provide instruction on how to terminate the agreement.
- The date and time that the termination will take place.
- Any reasons for the termination
- Date of the termination from the agreement
- How your business partner should follow up with you after the termination.
Ethics Count In Contract Termination Letter
Since we normally work with the vendors and people again it is important to have strong morals and business ethics when terminating an agreement. Be sure to pay your vendors when you have agreed to, be sure to give the appropriate notice if you may not be able to pay them, and do not enter into a contract unless you know for sure you can hold up your end of the deal. If not you may be burning a bridge that you will need one day. Be clear and professional with any termination letter with out using any personal insults or aggravated wording. There is no need to flame a fire when you just want to terminate a contract.
Contract Termination Horror Stories
At one point a small business owner tried to terminate an agreement with me in Santa Monica with out notice. The vendor had a manager tell me after I completed the work that they did not have the money to pay me and may not have it for some time. This caused a lot of problems because one person did not follow through with there agreement. Be sure this does not happen to you and have the money in the band before you hire someone for a job. You may be taken to court if you can not pay the agreed amount.
Example Contract Termination Letter
1/1/2012
Address of party 1
To whom it may concern:
Thank you for your business. Please consider this our notice to terminate the contract contract between (party 1) and (party 2) on good terms ending Month Day, Year. The original agreement allows this type of termination in section (provide section numbers here). The reason for the termination is (reasons for termination). If you have any questions about this contract termination please contact us by email at (email address).
Sincerely,
Party 2 Name
Address of party 2
Contract Termination Letter Follow Up
After you have delivered the termination letter (you may want to have someone sign for it if it is very time sensitive) it may be smart to follow up with a quick call to confirm they have received the termination letter. This may also be a good time to negotiate any additional contracts in the future to save the vendor relationship. Be sure that you have paid your vendor in full when the contract is terminated so there is no additional confusion on payments. This quick call has helped me in a number of situations where the letter was not received by the correct person or the mail was not delivered correctly.
Media For Contract Termination Letters
Each “Contract Termination Letter” is different because hopefully it will depend on the original contract to determine how the termination will go about. In many cases a fax, letter sent by USPS, or an in person delivery of the contract termination is required to process. This may be due to security reasons since if some contracts end and service is interrupted it could cost the lives of others. As an example you would need more than a phone call to cancel the electrical service at a 24 hour hospital.
In most cases a media company or a company that uses technology will allow for contract termination letters to be delivered by email or through their web site. They try to make it easy for their clients to get what they want by using the technology that is available to them. A simple phone call may also be enough to cancel your contract and they may send you an email letter in response so that you do not need to spend additional time creating a contract termination letter for them.
Email Example For A Contract Termination Letter
1/1/12
Cindy Shabbis
4455 Balboa Blvd.
Tarzana, CA 91345
To whom it may concern:
Thank you for your business. Please consider this our notice to terminate the contract contract between Laura Hulbecker and The Creative Agency on fair terms ending September 11, 2012. The original agreement allows this type of termination in section 2a. The reason for the termination is that the services provided did not meet our expectations in terms of the return invested in the project. If you have any questions about this contract termination please contact us by email at laura@hulbecker.com. Thank you for your business.
Sincerely,
Laura Hulbecker
1001 Aliention St.
Westwood Village, CA 90026
Contract Termination Letter Example PDF
1) Contract Tetrmination Letter Example
2) Contract Termination Letter Example 2
Companies Accepting Contract Termination Letters:
B2Review http://www.B2Review.com
Contractors Warehouse http://www.ContractorsWarehouse.com
Longship Marine http://www.LongshipMarine.com
Haircut Los Angeles http://www.HaircutLosAngeles.com
Gregory Hillman http://www.gregoryhillman.com
Companies Not Accepting Contract Termination Letters
These companies do not easily accept contract termination letters in our opinion:
ATT – They require years of contracts and say they do not receive your contract termination letter even after your contract has ended.
Triad – Triad will not cancel contracts even with other vendors pay them off. They still try to keep their clients
even after the appropriate notice
DirectTV – DirectTV also requires long term contracts that are not easy to cancel early if needed.
Thanks a lot! this sample letter helped me to a lot. though am a manager, but, this is my first job as manager, this site helped me find a termination letter ..thanks for sharing!!
I found this example extremely helpful when I needed to cancel an independent contractor agreement under good terms. Thanks!
Many many thanks.This site helped me very much. I am great full to this site.
Thanks a lot for this sample termination contract. It helped me lot. more power!
I used this format to dissolve a potential partnership; I don’t know how legal it is, but like Judge Milian (Peoples Court) and Judge Mathis always ask “Did you put in writing? Thanks allot.
Just used this to put some structure to a termination letter I had to write. I actually didn’t follow the format that much in the end, but somehow it still helped to read this and give it some structure, particularly in terms of what would now happen and tying up loose ends + follow-up. In my case, I’m not looking for repeat business, so that wasn’t too much of an issue, but it definitely helped. Thanks a lot.
Thank you so much! This really helped me a lot.
It can help to me……Thank you,…..
I found your site helpful
please help me make a letter to cut short my employment contract, meaning i will not finish my job contract,.. that i ‘ll make an early vacation as scheduled
Thanks for reaching out Leonor, to make a reasonable termination letter we would need to review your employment agreement. How are the early termination terms written in the current agreement?
Thanks a lot very helpful
Very helpful! Thanks for sharing.
Good information. I liked the commnt “on good terms”, tends to make the blow a little softer.
Hi,
We have contract in outsourced company for Kitchen Stewards from past 4 yrs and now our management wants to terminate this contract w.e.f 1st July 2011. The reason his they are providing the manpower on time and their salary will be always delayed so that our management wants to terminate this contract.
Please draft the letter and send it to me. I am very grateful to you.
Thanks & Regards,
Nethra
Thanks for the comment Nethra. After consideration, I would suggest using the standard example to terminate this contract. Do you have any previous terms that outline how the contract will be terminated?
I agree. Allowing the person to know in writing why you are terminating and if it is on good terms will help you create new contracts with their business or other related businesses in the future! It may also show you are content with their end of the agreement.
I have a question:
I am a an independent software developer and I am having a problem with my client.
The client has paid 3000$ up to date for a project that I charged $5000 dollars for. Everything was paid in cash.
When I showed him the product he was ultimately unhappy. He wasn’t unhappy with how the product was at the time, he was unhappy that the project was supposed to have some features that it didn’t.
I explained to him that during our initial meeting some of the features he requested would be possible and some would not. When I came to him with the features that would not be possible he refused to make a next payment to continue the projects development.
Now I am left with the project on my computer and we are exchanging professional words via email..
He wants to take me to small claims court but I don’t know what I am at fault for?
I want to terminate our relationship and I don’t know if I can use this letter because I am the person who he contracted out.
What do you think?
I’m still learning from you, as I’m trying to achieve my goals. I definitely enjoy reading everything that is written on your website.Keep the tips coming. I enjoyed it!
Adam, this is the type of industry and work that I have been doing for years as well. Some of my ideas include creating a contract that the client signs which details what will happen if you are not able to compete all of the features mentioned in the original quote. In my contract I provide the client with a full refund after 14 days if I am not able to complete all of the line items I detail. I also collect all of the finances for the project up front before I begin so this type of confusion does not happen.