Business Contract Termination Letter and Its Sample

There are many cases of business contract terminations every day for different reasons. If it happens to you, you will need to create a formal letter called a business contract termination letter. This kind of letter documents the event for both parties involved in the business.


Why Do You Need to Write a Business Contract Termination Letter?

This kind of letter is needed when you want to terminate a business contract professionally. With this letter, it means both parties agree the termination. So, either party will not prosecute after the termination. This written letter is the best way to end a business contract in a professional manner.

How Do You Terminate a Business Contract?

The most common way to end a business contract is to negotiate the termination. If you’d like to get out of a business contract, you should contact the other involved party. Then, you can negotiate the business contract termination. After that, you must document the termination in a written letter.

How to Create a Business Contract Termination Letter

To create such a letter, you should follow the steps below:

  • Make a salutation first.
  • Directly state the contract termination in the first paragraph.
  • Tell the facts and reasons why the business contract is terminated.
  • Don’t forget to give a thank.
  • Include your contact details.
  • Put your signature & name.

Tips to Create a Business Contract Termination Letter

Here are some tips to consider when you create this kind of letter:

  • Use a tone & wording displaying professionalism.
  • Start it by stating you want to terminate the business contract as well as the date of the termination.
  • Provide a reason or state the facts.
  • Note services owed by both parties.
  • Note how the great items that will be handled.

Business Contract Termination Letter Sample

If you need a sample of a letter for a business contract termination, let’s see here:


Dear Mr. Bill,

I inform you that I’ll no longer use your restaurant the main supplier for my catering business effective on January 15th, 2021. So, please accept this termination letter. I terminate our contract due to a change in my business strategy. I need a supplier that carries a different product line.

During the last six months, we’ve positioned our company to provide catering services for weddings. However, the majority of our current business comes from catering corporate events. That is why we have to make this decision.

On January 16th, 2021, we will change the name of our business officially to Galaxy Catering Services. I think this is the best time to terminate our business contract. Once again, thank you very much for your outstanding services. If you want to speak with me, you can call me at (111)-111-111.


Hecktor Allan


Wedding Catering Services


That is all about a business contract termination letter. If you have a plan to terminate your business contract, you can write a termination letter like the sample above. The reasons should depend on the facts.


You may also like...