90-Day Contract Termination Notice: Legal Steps & Best Practices

Key Takeaways

• A 90-day contract termination notice is a crucial clause that allows either party to terminate a contract with appropriate prior notice.
• Termination requires following specific procedures such as written notification, understanding cost implications, and ensuring compliance with the contract terms.
• Contracts can have termination for cause and termination without cause clauses, each with different implications for the parties involved.
• Employment contracts with 90-day trial periods must comply with labor laws, ensuring fair evaluation and due process before termination.
• Legal assistance can help navigate complex contract terms, ensuring compliance and protecting against potential legal disputes.
• The termination process varies depending on the type of contract, such as property management agreements, employment contracts, or business service contracts.

Having a 90-day contract termination clause is an important component of any contract that can often be missed. In the event you have a property manager or property management company that is not meeting your needs, or an employee not performing after a probationary period, the 90-day contract termination clause gives you the ability to end the relationship and move on. It is vital that you end the relationship based on the terms of your agreement so that you will not face possible repercussions for breach of contract.

Steps to Evoking a Termination Clause

When deciding to end a contractual relationship by evoking the termination clause, there are multiple steps you will need to follow. You need to make sure to:

• Give appropriate notice: Your contract will most likely require you to provide 30 to 90 days notice to be able to terminate the contract. If you do not request termination within the given timeframe, there is a chance you can be charged with a breach of contract.
• Make sure the notification is in writing: Whenever you terminate a contract, your intent to terminate should be given in writing. You should also send the notice by means of certified mail to ensure that it is received by the party and to have proof it was delivered in the appropriate time frame.
• Do not terminate if the contract requires cause that you do not have: Some agreements may require that the termination be for cause, which are specific reasons that are spelled out in the agreement. In the event you try to terminate one of these agreements without cause, the request could be ignored, or worse you could be held in breach of contract.
• Understand all costs of termination: Some contracts will require fees for terminating the contract early, even if the proper notice is given. Make sure you understand the fees that will be involved in the event you try to get out of the contract before its completion date.
• Inform tenants of management changes: Most likely your contract with tenants requires that you inform them of any management changes. This information should be given to the tenants in writing so they are aware of the new manager.
• Terminate the contract if the manager has breached it: If the manager has violated any terms of the contract, it can be in your best interest to terminate it since it will be unlikely you will feel secure again allowing them to run the property.
• Give a reasonable amount of time for the funds to be paid to you: It is important to remember that the property manager will need to make sure that all expenses are paid before they can determine the amount owed to you, so it is best to give them some time to get together the final amount due.
• Obtain copies of all paperwork: You will need to make sure you have possession of copies of all the important documentation such as leases, deposit information, income, and expenses.

Understanding Termination for Cause vs. Without Cause

Not all contract terminations follow the same process. Contracts typically include termination for cause and termination without cause clauses, each with different legal and financial implications.

• Termination for Cause: This occurs when one party breaches the contract terms, such as failure to perform services, legal violations, or unethical behavior. The terminating party must provide documented evidence supporting the breach.
• Termination Without Cause: This allows either party to end the contract for any reason, provided they follow the required notice period. In most cases, the 90-day notice requirement applies here.

Understanding which type applies to your contract ensures compliance with contractual obligations while minimizing legal risks.

Employment Law: 90 Day Trials & Termination

An employee can agree to a 90 day trial employment period if it is presented in writing and on the first day that they begin working. For a 90 day trial to be legally binding, it must follow the provisions set forth in the ERA. During this 90 day period, an employer must provide the employee with training and basic support to complete the duties of their job.

If the employer decides to terminate after this period, they must provide a notice to the employee that the work they did was considered unsatisfactory. The employer must have a reason for termination, or the action can be considered an arbitrary termination or termination without cause. If this is the case, then the termination would not be protected under the rules of the 90 day trial clause.

For the trial to not be void, the employer must have attempted to provide the employee with the tools to provide satisfactory work and made suggestions to improve the areas they were dissatisfied with. This can be recorded in monthly expectations and deficiencies that the employee is made aware of.

How to Draft a 90-Day Contract Termination Notice

A well-crafted 90-day contract termination notice should be clear, professional, and legally compliant. The letter should include:

1. Date of Notice – Clearly state the date the letter is issued.
2. Recipient Information – Include the name, title, and contact details of the party receiving the notice.
3. Subject Line – Clearly indicate it is a 90-day contract termination notice.
4. Statement of Termination – Specify the contract being terminated and reference the relevant termination clause.
5. Effective Termination Date – Indicate the last date of the contract after the 90-day notice period.
6. Reason for Termination (if applicable) – If required, briefly state the reason for termination, ensuring it aligns with contractual terms.
7. Transition or Next Steps – Outline any obligations, such as the return of company property or final payments.
8. Signature and Contact Information – The terminating party should sign and provide their contact details for any follow-up.

Providing a structured and legally sound notice helps ensure compliance and minimizes disputes.

Legal Considerations When Terminating a 90-Day Contract

Before issuing a 90-day contract termination notice, consider the following legal aspects:

1. Contract Review – Carefully examine the contract for specific termination clauses, required notice periods, and penalties.
2. State and Federal Regulations – Some industries and employment agreements must adhere to additional labor laws that override contractual terms.
3. Documenting the Process – Maintain records of communications, notices, and reasons for termination to prevent legal disputes.
4. Severance and Compensation – Some contracts may require severance payments, final salary payments, or additional compensation upon termination.
5. Dispute Resolution – If termination is contested, legal avenues such as mediation or arbitration may be required before taking legal action.

Employers and contractors should seek legal advice if they are unsure of their rights and obligations.

Frequently Asked Questions

1. Can a 90-day contract termination notice be revoked after it is issued?
   Yes, if both parties agree to retract the termination in writing before the effective termination date, the contract can continue under its original terms.
2. What happens if a party does not comply with the 90-day notice period?
   Failure to provide proper notice may result in financial penalties, legal action, or breach of contract claims, depending on the contract terms.
3. Does a 90-day termination clause apply to all types of contracts?
   No, the clause is commonly found in employment contracts, service agreements, and business contracts, but not all contracts include it. The terms should be reviewed before assuming a right to terminate.
4. Can an employer terminate an employee without cause within the 90-day probation period?
   Yes, as long as the employment contract includes a probation clause and termination follows state employment laws. However, wrongful termination laws still apply.
5. Do I need a lawyer to draft a 90-day contract termination notice?
   While not always necessary, consulting a contract attorney ensures your notice is legally sound and prevents potential disputes.

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