Home Blog Writing End of Contract Letter (Explained: All You Need To Know)

Writing End of Contract Letter (Explained: All You Need To Know)

Looking for an End Contract Letter?

How do you write a letter to end a contract?

What’s important to know about it?

Keep reading as we have gathered exactly the information that you need!

Let me explain to you how the End of Contract Letter works!

Are you ready?

Let’s get started!

What Is An End of Contract Letter

An end of contract letter is a letter that a contracting party sends another notifying the recipient that you are looking to end the contract.

A contract can end in many ways, when the contractual obligations are fulfilled, when a party no longer wishes to renew the agreement for another term, or when a party is dissatisfied with the work of the other.

No matter how the contract ends, the end of contract letter can be used to document that fact.

For example, if a contract ends when all the contractual obligations are fulfilled, the end of contract letter will highlight that and invite the other party to continue doing business in the future.

A party can use the end-of-contract letter to advise the other party that it is no longer looking to renew the agreement beyond its current term.

Also, the end of contract letter can be used by a party who is dissatisfied with the other party’s work and wishes to terminate the agreement.

Now that you know what the end of contract letter is, let’s see how it works.

Recommended article: What is a termination for convenience clause

Why Is An End of Contract Letter Important

Sending out an end of contract letter is important as it is a means to document the fact.

The end of contract letter is used to formally notify the other party of your intention to terminate the agreement.

Very often, the contract requires that a terminating party notify the other party in writing and follow certain procedural steps.

For instance, a contract may state that its term will automatically renew unless written notice is received by the other party no later than thirty days prior to the end of the contract term.

In this case, the party who is no longer looking to renew the agreement must send a notice at least thirty days before the expiration of the contract so that the contract does not automatically renew.

An end of contract letter becomes more important in situations when a party is looking to terminate the agreement due to the other party’s breach of contract or for cause.

In this context, the letter is very important as it may potentially be used as evidence in a lawsuit if the matter ends up going to court.

Recommended article: What is fraud in the inducement

When To Write An End of Contract Letter

Since the end of a contract letter may be potentially used in court in case of a dispute, you should ensure that you send the letter at the right time.

The first step is to look at the terms and conditions of your contract to see if you are required to follow any specific procedures.

For example, some contracts expressly require that a party send an initial notice notifying the other party of their breaches and give the other party some time to cure them.

Some other contracts will impose that the contracting parties refer the matter to their executive leadership in an attempt to find an amicable resolution.

If you are looking to terminate the contract for cause, you should consider sending the end of contract letter when you have sufficient evidence documenting the other party’s breach and have followed the preliminary requirements outlined in the contract.

If you are sending a letter to prevent the renewal of your contract, make sure you send the letter before the deadline imposed in the contract.

Recommended article: What is a voidable contract

How To Write An End of Contract Letter

The end of contract letter should be written carefully to ensure that it is properly documenting the circumstances surrounding the end of contract.

The main objective of this letter is to notify the other party that you are looking to terminate the agreement.

As a result, you must make sure that you express your intentions clearly and without ambiguity.

Typically, the end of contract letter will include the letter date, reference to the contract in question, reason for terminating the contract, effective date of contract termination, reference to any post-termination obligations, and signature.

Your end of contract letter should be short, clear, and to the point.

If you are terminating the agreement based on a certain provision of the contract, you should make reference to that provision.

You should aim to keep the tone of your letter neutral, factual, and polite.

Even though you may be dissatisfied with the other party’s work, your end of contract letter should remain professional and courteous.

Recommended article: Understanding a release clause

Sample End of Contract Letter

Now that you have a good understanding of what the end of contract letter is and how it works, let’s look at a sample letter to see how it’s written in practice.

Here is a sample end of contract letter when you’re looking to terminate the contract for cause:

June 20, 20XX

Mr. John Smith
Address 12345
City, State ZIP CODE

Re: Contract Termination Notice

Mr. Smith:

This letter is sent to you further to inform you that we wish to terminate the contract dated January 15, 20XX signed between Company A and Company B.

Further to Section XX, we are terminating the agreement as your organization has failed to respect its obligations under the contract and has not cured its breach further to our prior notices.

Please note that the effective date for the termination of the contract shall be August 1, 20XX.

We wish to remind you of your post-termination obligations outlined in the contract and ask that you comply with the same.

We appreciate your immediate attention to this matter,
Yours truly,


NAME
COMPANY 
TITLE 
Author

Recommended article: What is a letter of acceptance

End of Contract Letter FAQ

Why should I send an end of contract letter?

Sending an end of contract letter is important as it allows you to document the circumstances surrounding the end of the contract.

If the contract ends on a positive note, the letter will look more like a thank you letter.

However, if the contract ends on a more negative note, the letter will document the basis for the termination.

Do you always need to send an end of contract letter?

The answer is that it depends.

In some cases, the contract you’re looking to terminate may not require you to send a letter.

In that case, you may get away by not sending one, although it’s highly advisable.

However, if your contract requires you to send a letter to terminate it, you must follow the contract requirements.

In what situation can an end of contract letter be sent?

You can send an end of contract letter in many situations.

The most common examples of when an end of contract letter is sent are:

  • To terminate a commercial contract
  • To notify a vendor of a non-renewal of a subscription agreement
  • To terminate a lease agreement
  • To terminate an employment contract
  • To notify another party of a breach of contract

What tone should you use in an end of contract letter?

The tone of your letter should be formal, professional, and courteous.

No matter why you are putting an end to your contract, you should ensure that you remain as factual as possible without expressing too much of your emotions.

Stay factual, formal, and to the point.

Recommended article: What is frustration of purpose 

Business and law blog

Takeaways 

So there you have it folks!

How do you write an end of contract letter?

The end of contract letter is an important document legally documenting a contracting party’s intention to terminate the contract.

The end of contract letter can be sent to confirm the completion of the contractual obligations, notify the other party of a non-renewal of the term, or terminate the agreement for cause.

When you’re writing your letter, it’s important that you follow any requirements set out in the contract in question.

You may want to consult a contract attorney for guidance if you are unsure what to include in your letter or how to draft it.

Now that you know what an end of contract letter is and how to write it, good luck with your contract!

Breach of contract letter
Contract termination agreement
Rescission of contract
Undue influence
Efficient breach
Fundamental breach
Contra proferentem
Breach of warranty
Breach of conditions
Author

Amir K.
Hello Nation! I'm a lawyer by trade and an entrepreneur by spirit. I specialize in law, business, marketing, and technology (and I love it!). I'm also an expert SEO and content marketer. On this blog, I share my experience, knowledge, and provide you with golden nuggets of useful information. Enjoy! Feel free to connect with me on LinkedIn.

Most Popular

Financial Services Industry (Explained: All You Need To Know)

Financial Services Industry (Explained: All You Need To Know)

Transporation Industry (Explained: All You Need To Know)

Transportation Industry (Explained: All You Need To Know)

What Is A First Look Deal (Explained: All You Need To Know)

What Is A First Look Deal (Explained: All You Need To Know)

Tag Along Rights (Explained: All You Need To Know)

Tag Along Rights (Explained: All You Need To Know)

Drag Along Rights (Explained: All You Need To Know)

Drag Along Rights (Explained: All You Need To Know)

Editor's Picks

Exclusive Agency Listing (All You Need To Know – Exclusive Agency)

Exclusive Agency Listing (All You Need To Know - Exclusive Agency)

Vertical Merger (Complete Definition: All You Need To Know)

Vertical Merger (Complete Definition: All You Need To Know)

TTM Meaning (All You Need To Know)

TTM Meaning (All You Need To Know)

Acquirer vs Acquiror [Legal Definition And Examples]

Acquirer vs Acquiror [Legal Definition And Examples]

B2B Meaning In Business (Explained: All You Need To Know)

B2B Meaning In Business (Explained: All You Need To Know)