Creating a Contract Termination Letter

Contract Termination Letter

What Is a Contract Termination Letter?

When you enter into a contract, you expect all parties involved to uphold their end of the deal. But sometimes, things do not go as planned. You may find yourself unhappy with the other party’s services, they may not deliver the results you expected, or you may find that you do not need their services for as long as you once thought. When these circumstances arise and you decide you want to bring the contract to an end, you need to notify the other party with a contract termination letter (sometimes called a “breach of contract notice”).

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When Should I Use a Contract Termination Letter?

You must use a contract termination letter any time you bring a contract to an end. This may be a contract between two individuals, an individual and a business, or between two businesses.

Not all contract terminations result from a poor working relationship. These notices are also a formal way to end a working relationship and even thank another party for their work. But even in a positive relationship, you must have the notice in writing. It’s important to make the end date clear. This will protect yourself in case the other party tries to make any claims about the contract end date in the future.

What Does a Contract Termination Letter Include?

Because you want to cancel a legally binding contract, you must include certain details in your termination letter:

  • The contract termination date
  • When the contract should have end
  • The original terms of the contract
  • The reasons for ending the contract

Depending on the situation, you may need to include more information in your letter. An experienced attorney knows exactly what to state in your notice.

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Why Do I Need an Attorney for a Contract Termination Letter?

You can find many sample contract termination letters on the internet. However, the best practice is to consult with an attorney who can draft a thorough and exact letter for you.

Letters detailing a contract termination must include specific phrasing and details to make it valid. This can include referencing the original contract to prove that you followed the guidelines put in place, you have proof that you took steps to resolve the situation before breaching the contract and you have a description of the actions the other party too to bring you to that decision.

In certain scenarios, it may also be appropriate to first notify the other party of your intention to terminate the contract over a phone call. An attorney should make this call for you to ensure proper handling (and to protect your legal and professional interests). After making the call, your lawyer drafts a contract termination letter to confirm what all parties discussed over the phone.

In some cases, you may also need to gather evidence to show that the other party did not uphold their end of the contract. Your attorney should know if this is necessary and can advise you on any other steps that you may need to take.

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How Much Does a Contract Termination Letter Cost?

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The legal professional you choose to work with sets her or his own pricing structure and informs you of these costs before you enter an agreement. The final cost of working with a lawyer to draft your contract termination letter may depend on several factors.

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