End of Agreement Letter: Everything You Need to Know
An end of agreement letter is usually written when an agreement doesn't work out between you and another entity.3 min read
An end of agreement letter is usually written when an agreement doesn't work out between you and another entity. If you no longer require the services of an entity or you're dissatisfied with the way an entity is delivering on a contract, sending a Notice of Contract Termination notifies all parties of the contract's termination.
Purpose of a Contract Termination Letter
A Notice of Contract Termination is also called Notice of Cancellation of Contract or a Contract Termination Letter. These kinds of letters are formal declarations indicating the intention of the sender to terminate a contract with the receiver.
The contract termination letter states when a contract will end and the provisions under which a contracting party is allowed to end the agreement. The letter is a record showing that you have notified the other contracting parties about the termination of the contract. This way, you have proof in the event that the other parties claim they never received notice.
Not all contracts end in disappointment or disagreement. A contract termination letter sometimes serves as a courtesy note to thank the other parties for their service and preserve a courteous, professional relationship for the future.
Tone of a Contract Termination Letter
The tone of the letter should not only be formal and straightforward but also empathic and courteous. The letter should express your regret at terminating employment while thanking the employee for their services. However, the letter shouldn't indulge in sentimentality or sugarcoat the facts.
A notice of contract termination letter must contain specific details, such as exact dates, in order to prevent misunderstandings. The letter must be drafted carefully to prevent loopholes that could result in problems, such as a cause of action for damages. The letter must also be in line with the method of termination documented in the original employment contract.
Uses of a Letter Ending a Contract
A letter ending a contract is used by an organization to formally end a contract with another organization. The letter becomes necessary when it is required to have a written record of how and when the contract was terminated or if a contract must be terminated in writing.
The letter also serves as a courtesy note to thank the other contracting party for their services or create the record of contract cancellation. The letter should include the following key points:
- The purpose of the contract.
- The contract date.
- The reason for terminating the contract.
- Any termination obligations.
- The date of the letter.
Reasons for Using Non-Combative Language
In cases where you are dissatisfied with the services of the other party, you may be tempted to use combative language or an angry tone when drafting the contract termination letter. Even if the other party has breached contract, it is vital that you maintain a polite tone when writing contract termination letters
You may wish to enter into a future contract with the opposing party and using a combative tone destroys the professional business relationship you have built. There is also a better chance that the other party will try to make amends or re-negotiate the contract if a conciliatory tone is used to draft the letter. Friendly language increases the possibility that the other party will attempt to rectify the differences or disagreements between both parties.
When writing the letter, ensure that it is brief and doesn't state multiple reasons for terminating the contract, unless you wish to form a basis for a damage claim based on a breach of contract. Statements or admissions used when writing the letter can be used against you in legal proceedings.
A Sample Contract Termination Letter
Dear Sir or Madam,
I am writing this letter in reference to the contract entered into on Mar. 30, 2015. Pursuant to Section 9.4 of the Contract, we regret to inform you of our intention to terminate the contract in line with the terms and conditions set forth. We will remit all payments and obligations due under the contract. All payments will be made not later than 60 days from the termination of contract. We look forward to doing business with you in the future and hope that we can enter into a more profitable arrangement.
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