A contract termination letter should include the name of the contract, contract number and contract beginning date. The letter should clearly state the date on which the contract is to terminate and indicate that the action to terminate is consistent with contractual specifications regarding termination. It should be respectfully written.
Contract termination letters should be to the point, carefully drafted and, ideally, reviewed by legal counsel. Whether referencing the violations or performance issues leading to termination in the letter or not, it is important to avoid ambiguities that might provide an opening for the contractor to legally challenge the termination. The possibility of future work may also be mentioned in order to leave the door open and end the current business relationship on the most positive terms.
If the contract specifies that termination must be by mutual agreement, a letter of termination acts as a formal declaration that ending the agreement is in the best interest of both parties. The letter should indicate that the parties mutually terminate and cancel the contract, stating the effective date and formally releasing both parties of all obligations.
A thorough review of the contract prior to writing a termination letter is essential to avoiding legal missteps.