Before the Contract

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 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.

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

1/1/2009

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).  Thank you.

Sincerely,

Party 2 Name

Address of Party 2