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How to Write a Terminating Contract

There are instances when even good business agreements need to be terminated. If you need to nullify a contract, then you need to write out a termination contract or termination contract letter.

The purpose of a termination contract is to explain why the original contract is being terminated, to make sure that all parties involved are informed about the contract termination, and to set down in writing new terms that end the original agreement. A few key elements need to be in any termination contract.


Step by Step : Write a Terminating Contract

Write a Terminating Contract


Open a new document in your word processing software.

Write out your name and contact information (one piece of data per line), left-justified at the top of the page. Double-return and write out the name and contact information (one piece of data per line) of the party or parties to whom the termination contract is being sent.

Double-return and type “RE: Termination Contract.”

Double-return and type the date.

Double-return and write your salutation.

Double-return and start the first paragraph. Thank the involved parties for their business or assistance and include a statement of regret introducing the idea of the contract termination (e.g., “Although we have enjoyed working with you, unfortunately not all of our company contracts can be renewed at this time.”) Then, state that the original contract between [name all parties] starting on [begin date] and ending on [end date] is being terminated.

Double-return and start a new paragraph. Quote directly from the original contract agreement to show your authorization to terminate the original contract (e.g., “Section 1.5 of our original agreement provides authorization for contract termination and states: ‘[contract data]'”). If you did not provide such a clause in your original contract, then cite any applicable laws that apply to your situation.

Double-return and write a paragraph that lists the reasons for terminating the original contract.

Double-return and reiterate your contact information. Urge the involved person(s) to contact you with questions or concerns.

Double-return and write your closing (e.g., “Sincerely”). Then return 4 times (leaving space for a handwritten signature) and type out your full name, followed by a comma and your job title and company, if applicable (e.g., Jane Businessperson, CEO Company A). Save your work and print it out when you are ready to send it.


Tips & Warnings

It may be helpful to refer to the sections of the contract that have been violated (if applicable) after quoting your authorization for termination. Then you can refer to an appendix or enclosure, which will be a copy of the original contract.

Remember, be courteous. Just because you are terminating a contract doesn’t mean you want to terminate a relationship altogether.


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