Business Contract Termination Letter – A complete guide with 3 samples

Last Updated on August 10, 2021

A business contract termination letter is a formal document written to end or terminate the business agreement or a business relationship between two parties. Some many different reasons or purposes might call a termination.

Tips for writing the business contract termination letter

There are many several different ways to write a formal business letter. It usually depends on the intent of the letter, the recipient, and the reasons for writing the letter. There are no set rules but focus on the situation and cancellation reasons.

Here are some tips to follow while writing a business contract termination letter:

Keep your tone strictly professional

Remember that the contract termination letter can be used against you, so refrain from writing anything which can damage your reputation letter. So remain focused on the reasons for cancellation.

Keep your tone and the structure of the letter professional. It is best to write all the points before finalizing the draft. Always write a one-page business contract termination letter and ensure that the content is brief.

Reasons for writing the business contract termination letter

State the reasons for canceling the contract and be specific. You have to be very clear on why you are canceling the agreement. You may need to provide valid documents to support the claim and need them during legal disputes.

State the date of the termination

Most business contracts need to be renewed and signed at a specific date. Make sure to state the terminal letter in the business contract termination letter to stop the auto-renewal.

Follow the guidelines mentioned in the contract letter

Sometimes the term to write the termination letter is specified in the official contract letter. It is not necessary to explain these terms and conditions again.  While drafting the business letter, remember to tackle all the circumstances.

Express your gratitude and well-wishes

You are terminating the contract but don’t forget to appreciate the counterparty for their services.  Also, wish them well for the future at the end of the business contract termination letter.

It is not only an act of professionalism, but it is a way to show you can deal with this situation with respect and dignity.

What is the format of a business contract termination letter?

Follow the template below to write a business contract termination letter professionally:

[Name of the person]
[Position & Company Name]
[Address]
[City, State]

 

[Current date]

 

[Recipient’s Name]
[Position & Company Name]
[Address]
[City, State]

 

Dear [Recipient’s Name],

The first paragraph: [Describe that you are canceling the contract for]

The second paragraph: [Describe briefly or in detail why you are canceling the contract]

Conclude your letter by showing your gratitude and ask them to contact you in case of any inquiry.

Yours Sincerely,

[Sign here]
[Type Name]
[Name of the person]
[Position & Company Name]
[Address]
[City, State]

 

[Current date]

 

[Recipient’s Name]
[Position & Company Name]
[Address]
[City, State]

 

Dear [Recipient’s Name],

The first paragraph: [Describe that you are canceling the contract for]

The second paragraph: [Describe briefly or in detail why you are canceling the contract]

Conclude your letter by showing your gratitude and ask them to contact you in case of any inquiry.

Yours Sincerely,

[Sign here]
[Type Name]

Samples of Business Contract Termination Letter

1.Sample 1

Amanda Smith,
President, ABC Company
123 Main Street
Bakersfield, CA

August 9, 2021

Thomas Haldon,
President, XYZ Company
123 College Street
Bakersfield, CA

Dear Mr. Thomas,

This letter is written to inform you that we will no longer require the services of Express Delivery as of September 1, 2021. With this notification, we comply with the minimum notice period required by our agreement.

Your company has always met our expectations and provided us an incredible service in the past. However, we have decided to terminate our business contract due to a change in the business strategy.

From this moment, our company will not place any more orders with your company. We won’t cancel any orders or deliveries arranged before this letter unless we explicitly inform you.

Ideally, all outstanding orders should be completed before our contract is officially terminated. On our part, we will clear any outstanding amounts in our account by August 31, 2021. To that end, we would like to receive all relevant invoices by August 29, 2021.

Please confirm the receipt of this letter and the termination of our letter. If you have any questions, you can reach me at [email protected]

We would like to thank you for our long-standing collaboration.

Yours Sincerely,
Amanda Smith

2. Sample 2

David Mark
Vice President, OneTech Sol
123 Winglet Road
Miami, Florida

August 10, 2021

Jack Smith
Owner, Food Service Inc.
456 William Royce Street
Miami, Florida

Dear Mr. Jack,

I am writing this letter to inform you that as of September 1, 2021, we will no longer be using your cleaning services for our hotel chain. Please accept this letter as the official advanced notification specified in our contract.

We are terminating our contract due to a significant change in our business plan. Although I am pleased with Silver Cleaning’s service, this change is necessary for us in light of the direction we are moving in.

We recognize that you have been our go-to cleaning company for the past seven years. Our company appreciates your high standards and attention to detail. We expect to maintain the standards that your organization has set as we move forward.

Thank you, and if you have any questions regarding this contract termination letter, please call me at 518-505-5587.

Sincerely,
John Smith

3. Sample 3

David Mark
Director, Elite Hotel Groups
456 Green Street
South Gate, LA

August 10, 2021

James West
Owner, Home Food Inc.
789 Main Street
South Gate, LA

Dear Mr. James,

We are regret to inform you that OneTech Solution is terminating the Home Food Service contract, which was executed on September 10, 2019. The notice compiles with the required one-month notice and other contract terms for the termination.

Due to the Corona Virus and the current economic situation of the country, our company is unable to continue the agreement.  Consequently, we decide to terminate our contract and discontinue further transactions with you.

We were pleased with your service and would like to thank you for an incredible facility. Please accept our apologies for any inconvenience that may have caused you.

If you have any questions or need further information regarding this issue, please reach out to me at [email protected]

Yours Sincerely,
David Mark

 

The above guide and samples will help you to write a business contract termination letter in a professional way.

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