MAKE YOUR FREE Letter Ending a Contract

Making your Letter Ending a Contract online is simple. Just answer a few questions and Rocket Lawyer will build your document for you. When you have all of the information about the contract and your situation prepared in advance, creating your document is a quick and easy process. 

You’ll need the following information:

The sender and the recipient

• What are the sender’s (ie the party ending the contract’s) name, address, and legal structure? If it’s a company, what is its company number? 

• Who is the sender’s signatory, if it’s a company or a partnership? This is the person who will sign the Letter on the company’s or partnership’s behalf.

• What is the name and address of the Letter’s recipient (ie the other party to the contract that is being ended)?

The contract

• What is the contract name or reference (ie how will you identify the contract to which the Letter applies)?

• On which date was the contract signed?

Contract termination

• Is the contract being ended because the other party has breached the contract (ie they’ve failed to adequately perform their obligations under the contract) or for the sender’s convenience?

• If for the sender’s convenience, which clause of the contract allows for termination for this reason (eg by giving a specified amount of notice without either party needing to be at fault)?

• If the other party breached the contract: 

  • What are the recipient’s relevant obligations under the contract?

  • How did the recipient default on their obligations under the contract? On which date did each default (ie breach) occur? 

  • Can the recipient remedy the default (ie is there a notice period in the contract for remedying defaults and is this specific default capable of being remedied)?

    • If so, which clause of the contract allows for a remedy period and how many days does the recipient have to remedy the default?

    • If not, which clause of the contract allows for immediate termination in the event of defaults that cannot be remedied?

• Are there any specific actions that the recipient needs to take after the contract ends (eg working with the sender to manage unfinished projects)?

The Letter

• If the recipient is a company or a partnership, is the Letter addressed to the recipient’s managing director, a specific person that the contract specifies is to receive notices, or another person (ie job title)?

• What is your correspondence reference for this Letter (ie the number, code, or phrase by which this Letter can be identified in future communications)?

• On which date is the Letter to be sent? 

• When will the notice period set out in this Letter (ie to end the contract) start? This allows you to set a time period that takes into account postage times or similar.

Letters Ending Contracts inform the recipient of the sender’s intention to end a contract that both are party to. To do this, this Letter Ending a Contract template includes the following terms and sections:

Names, addresses, date and reference

The Letter starts with a standard letterhead structure, clearly setting out the parties to the contract (ie the sender and the recipient), their addresses, and the date of the Letter. The reference number or code the parties can use to identify this Letter is also set out here.

Re: Notice of termination of the contract

The body of the Letter starts with an identification of the Letter’s purpose: providing the recipient with formal notice of the sender’s intention to terminate (ie end) the relevant contract.

Introduction 

Next, the parties to the contract in question are identified and the date of the contract, along with which party is expressing a wish to end the contract.

Notice

The content of this section will differ depending on the reason why the contract is being ended.

If the contract is being ended for a reason other than the recipient’s default (ie not because the recipient has failed to perform their obligations under the contract), the clause of the contract that allows the sender to end the contract in these circumstances is identified and it’s stated that the notice period specified in the contract itself is being given (ie the contract should end after that period of time has elapsed).

If the contract is being ended because the recipient has not adequately performed their obligations under the contract, this will be set out. The recipient’s relevant obligations under the contract are identified and how the recipient has defaulted on these obligations is explained. If the recipient has a chance to remedy their default (eg by improving performance), this is also communicated, along with the length of time the recipient has to achieve this and the fact that, if they don’t, the contract will then be ended. The clause of the contract allowing for such a remedy period is also identified. If no remedy period is available, this is noted and it’s highlighted that the contract is to end without a notice period on a specified number of days after the Letter is sent (eg 2 days, to take into account the Letter’s postage time).

Reservation of rights

This section will be included if the contract is being ended because the recipient is in default of the contract. It will set out the sender’s express reservation of their rights to claim any losses suffered due to the recipient’s breach of contract, under the contract and under the law more broadly.

Acknowledgement and further actions

This final section asks the recipient to acknowledge when they receive the Letter. It also sets out various things that the recipient should do if and when the contract ends. For example, return all of the sender’s property, destroy any confidential information relevant to the contract, and any other specified actions.

Yours faithfully…

The Letter ends with a space for the sender to sign and date before the Letter is sent. 

If you want your Letter Ending a Contract to include further or more detailed provisions, you can edit your document. However, if you do this, you may want a lawyer to review the document for you (or to make the changes for you) to make sure that your modified Letter complies with all relevant laws. Use Rocket Lawyer’s Ask a lawyer service for assistance.

Make sure you give the recipient enough notice

Complying with notice periods is a legal requirement. For example, if you’re party to a contract that requires 14 days’ notice in order to be ended in the absence of either party being at fault, make sure the recipient of your Letter Ending a Contract actually has 14 days’ notice from the time they receive your Letter until the time that you treat the contract as ended. Make sure you take into account service considerations, for example, postage times. Otherwise, you may be considered to have stopped performing your obligations under the contract too soon and, consequently, to have breached the contract before it ended (eg if you stop delivering services too soon). 

Consider other options if you no longer want to be party to a contract

If you no longer want to be party to a contract (eg if you no longer want to provide or receive goods or services), consider other options before deciding to end the contract. For example, consider:

• novating the contract using a Novation agreement - to end one party’s benefits and burdens under a contract whilst creating a new, otherwise identical contract with a new party. This could be helpful if, for example, you’re selling the part of your business that deals with the relevant goods or services provision

• assigning the contract using a Letter assigning a contract - to transfer only the benefits of a contract to a new party. For example, if you no longer need a business’ services but you were happy with its service provision and want to transfer the contract to an associate’s business

• varying the contract -  agreeing on changes to the original contract so that the contractual relationship can be continued on different terms (eg if you want to continue providing services or goods but need to receive more money in return to meet your costs)

Comply with any restrictions imposed by a contract after it’s ended

It’s not uncommon for some provisions contained in commercial contracts to be intended to continue after the contract itself has ended. For example, terms preventing parties from disclosing each other’s confidential information or preventing them from competing with each other for a certain period of time. You should check your contract carefully for any such restrictions and make sure to abide by them - as long as they’re reasonable, they’re generally enforceable.  

Understand when to seek advice from a lawyer

In some circumstances, it’s good practice to Ask a lawyer for advice to ensure that you’re complying with the law and that you are well protected from risks. You should consider asking for advice if:

• there is no written contract in place

• you are not sure whether the other party is in the wrong (ie whether they’ve breached the contract)

• you want to make changes to the contract

• you are in the wrong and you want to end the contract

• you need help navigating clauses of the contract that continue to apply after termination