Subcontractor Termination Letter

When a subcontractor becomes a liability, it is time to end the professional relationship. Whether you notify the the individual or company in person or by mail, a well-written subcontractor termination letter that details cause and cites evidence can help protect the financial investment of a job and your business.

Format and Content

Depending on the specifics, there may be legal considerations for firing a subcontractor before the conclusion of a contract. Present your case for termination in a letter that gives specific examples as to why you are firing the subcontractor. Back each example with a statement of documented evidence. If you owe the subcontractor money, state the amount owed and how and when it will be paid in the subcontractor termination letter format. Even if you notify the subcontractor in person, send the letter by certified mail with a return receipt requested.

Sample

In this subcontractor termination letter sample, the subcontractor is a company. The general manager is informed the contractor will no longer use the company as a subcontractor on any new work due to ongoing and repeated performance and quality related issues. The case the contractor makes includes details that will be hard for the subcontractor to refute.

Dear Mr. Harbor:

This letter is to inform you, that effective immediately,May 10, 2013, the contract between Southwest Contracting Services and Floors and More is being terminated due to a breach of the performance and quality clausecontained in the contract terms. This decision is final and will not be negotiated. For clarification, I am outlining some of the more egregious violations of our contract below.

On March 5, 2013, your company was contracted to install new flooring in the commercial building located at 432 S. Collins, Tucson, AZ 89634. The contract called for solid oak flooring; your company installed laminate flooring. Although your company fixed the problem, the mistake caused a delay in the schedule and Southwest Contracting was forced to pay the owner of the building a 10% penalty. You were apprised of the penalty but failed to offer any solution that would help Southwest Contracting cover the loss.

On March 15, 2013, your company was contracted to install new carpeting at a residential address located at 43 Juniper Road, Tucson, AZ 89634. Your company failed to show up on the agreed installation date. The owner of the residence took off work on this day to allow your crew access. Upon hearing from the customer, I contacted your company immediately and was informed the work in question was not listed on the schedule. After I faxed you a signed work order as proof, you agreed the fault was on your end.

However, this did not help pacify the customer, as the carpeting had to be ordered and installation was delayed by a full 2 weeks.

In the course of doing business with your company, our customer service representatives have logged more than 10 complaints due to faulty workmanship, damage to the property where work was being performed, missed appointments, and the installation of substandard materials. It is my belief that continuing to use Floors and More as a subcontractor would seriously jeopardize our company’s reputation and our ability to make a profit.

I am able to substantiate all of the claims in this letter with documented proof. Your company has been paid in full for all work completed. If you have any questions, you may call me at (555)-555-5555 during normal business hours.

Sincerely,

Brad Dehart

Mr. Brad Dehart

General Manager

Southwest Contracting Services