Business Contract Termination Letter

Businesses end contracts with other businesses on a daily basis and for a variety of reasons. A formal contract termination letter documents the event for both parties.

Content and Format

Use a tone and wording that displays professionalism, regardless of the reason for terminating the contract. Begin the letter by stating you intend to terminate the existing contract and the date the termination will take effect. You may give a reason or you may simply state the facts as they pertain to the situation. Note any monies or services that are owed by both parties and how the outstanding items will be handled in the business contract termination letter format.

Sample

Here, the owner of a catering service gives notice to her supplier that she plans to terminate the contract between the two businesses in 60 days. She expresses her appreciation for the high quality of service she has received from the supplier in this business contract termination letter sample.

Dear Mr. Hill,

This letter is to inform you, that as of June 1, 2013, I will no longer be using Shreveport Restaurant Supplyas the main supplier for my catering needs. Please accept this letter as the official 60-day notification specified in our contract. I am terminating our contract due to a change in business strategy for Alice’s Catering Services. Although I have been pleased with the services and product quality your company provides, this change makes it necessary for me to switch to a restaurant supply company that carries a different line of products.

Over the course of the last 6 months, we have been positioning our company to emerge as one of the premier catering services for weddings. Currently, the majority of our business comes from catering corporate events. While we have done very well in this sector, it has always been my heart’s desire to work in the wedding industry. During the next 2 months, we will gradually fade out the corporate catering aspect of our business with a plan to concentrate on high-end wedding catering after June 1, 2013.

We are in the negotiation process with other business suppliers that specialize in high-end catering products. Although I intend to use specialty suppliers almost exclusively, I firmly believe in having a backup supply source available at all times.If you are able to supply the products I need to support the company’s future direction, I will open to listing your company as a backup supplier.

On June 1, 2013, we will officially change the name of our business to Premier Wedding Catering Services. Although our contract does not call for minimum orders, I feel that it is in your company’s best interest to notify you that our supply orders will decrease over the next 2 months. We currently have contracts in place to provide catering services for 25 corporate events. After these contracts are satisfied, we do not intend to pursue or accept new business in the corporate event industry.

Thank you again for the outstanding service your company has provided. If you have any questions pertaining to this letter, please call me at (555)-555-5555.

Sincerely,

Allison Hansen

Allison Hansen, CEO

Alice’s Catering Services