8 Business Contract Termination Letter Templates Your Company Needs

Lyman Frank Baum wrote, “Everything has to come to an end, sometime” in the Marvelous Land of Oz. Not surprisingly, it also applies to business contracts and professional agreements.

A contract might end quickly, or it could be years before the need to terminate arises. Regardless, a company must legally draft and present a contract termination letter to end an agreement under legal and professional terms.

In this guide, you’ll find several visual templates for the HR department to use the next time a contract needs dissolution. You’ll also learn to create a branded letter template to use as often as you need. And with the help of dynamic fields, your team will save time and effort during the process.

Here’s a short selection of 8 easy-to-edit contract termination letter templates you can edit, share and download with Visme. View more templates below:

Table of Contents

• What Is a Contract Termination Letter?
• Why are Contract Termination Letters Important?
• 8 Contract Termination Letter Templates
• How to Write a Termination Letter
• Next Steps After Sending a Contract Termination Letter
• Contract Termination Letter FAQs

What Is a Contract Termination Letter?

A contract termination letter is an official document informing different parties about the end of a contractual agreement. It is essential documentation when one party wishes to terminate a contract lawfully and ethically. The dissolution of a business relationship between business partners, employers and employees, business owners and freelancers, or any contracted work needs a contract termination letter.

Are you unsure of how to create a document with Visme? This video will help.

Why are Contract Termination Letters Important?

Just as a contract is important to begin a working relationship, the contract termination letter is crucial to ending it. As most business owners know, working without a contract is a potential liability for both parties. There are legal, ethical and professional reasons behind drafting a contract termination letter.

• Making all communication official and legally binding in a company's HR or hiring position is always in your best interest.
• Contract termination letters are important to keep professionalism front and center when dissolving a partnership, agreement or employment contract.
• They help set the records straight and prevent future legal disputes which could run into millions of dollars.

All official business letters, contracts and communication documents, including contract termination letters, must be revised by the company lawyer to make sure everything is properly worded and explained.

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8 Contract Termination Letter Templates

1. General Employment Termination

Employment contract termination letters are the most used in employment termination cases. These are documents that inform an employed party that their contract has ended. They must be sent to the employee with enough time to leave the premises and return any company equipment.

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If you’re unsure of what to include in your letter, use the Visme AI writer to generate high-quality content in seconds.

2. Probation Period Termination

A probation period termination letter signals the decision of an employer not to continue with a long-term contract. For this business termination letter to be legal, there must have been a clause about the probation period and possible outcomes in the contract.

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3. Partnership Termination

Terminating an official partnership needs a professional termination letter that includes all the essential settlement information in the dissolution. Include all termination terms stated in the partnership proposal or contract to ensure it is legally binding.

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4. Influencer Contract Termination

Starting any influencer agreement with a contract that states everything expected from each party is important. In the same way, it’s essential to end an influencer agreement with a contract termination letter. Include all important information about the ongoing status of proprietary content and ownership of user-generated content in your agreement termination letter.

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5. Freelance Contract Termination

Freelancers who work under contracted terms will need a service contract termination letter when the agreement ends or a breach has occurred. Ensure you include information about ownership rights to any work the freelancer completed under contract.

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6. Service Agreement Termination

It's always a good idea to have a contract when one business hires the services of another. Therefore, it’s essential to create a contract termination letter when one company no longer needs the services of another.

This business termination letter template provides a great starting point and ensures you don’t leave out any important details.

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7. Vendor Termination

Vendors under contract have responsibilities to keep with the business they are catering to. If that relationship must end, sending a contract termination letter and keeping things professional is essential. With this business contract termination letter sample, you can modify your content to fit various types of contracts or termination scenarios.

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8. Academic Termination

Academic contracts for university acceptance are another type of contract that needs a termination letter in the event of an incident that warrants dissolution. This would generally be something like expulsion from the academic institution.

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These eight contract termination letter templates will make it easier to end agreements when necessary. In case you need to draft a new business contract, we have templates for that too! Check out our blog post on business contract templates for helpful tips and free templates.

How to Write a Termination Letter

Writing a termination letter is simple. Once you get past the standard format, the trick is in the details.

Wording each section succinctly is essential to clearly and respectfully communicate the termination. You’ll need a document writing tool and a Visme termination letter template. Likewise, you can also use a branded letterhead template with your company details.

Here are the steps to follow and create a branded contract termination letter.

Start With The Letter Format

Contract termination letters must follow a standard professional format, starting with your company address and the date the letter is sent. If your branded letterhead includes the address in the design, only place the date.

Continue with the name of the recipient and address. Open the letter with a professional salutation. “Dear” is your best option if you aren’t sure. If the relationship is close, you can choose another salutation that aligns with your company's voice. Steer away from gendered salutations and simply use the recipient’s name.

Here are some visual design tips to make the text easier to read and transmit an air of professionalism and decorum. If your company already has a branded letter format, by all means, use it. But these tips can help you should your format need a review.

• Select a standard letter font; Times New Roman, Colibri, Verdana, Arial, or Georgia. Even better, use your brand font for body text.
• Size the font between 10 and 12 pt, depending on how much content you have. Remember that it’s better to keep the letter to only one page.
• Left-align the text or use the justified option if it looks good.

If necessary, leave a space at the bottom for your signature and stamp.

Here’s a visual example of how to format and write a contract termination letter.

Made withVisme

Write The Letter

1. Begin With The Date of Termination And The Cause or Reason

To begin writing the letter after the salutation, follow the communication standards for a contract termination letter. Begin by stating the date of termination and the reason why. If you plan to send the letter as a digital PDF, include a link to the original contract as a point of reference. Likewise, you can add a link to your company’s official conduct regulations if the reason to terminate was a breach of contract.

2. Continue With The Settlement Details

In the next section, include all the settlement information per the contract. Do they have to return equipment or company-owned items? Will they have to hand in key cards or log out of productivity platforms? List all the details and a date when they’re expected to be completed.

3. Show Gratitude and Add a Polite Closer

End the letter with a show of gratitude towards the recipient. Even if the cause of termination is negative, find a way of ending the letter positively. Try offering a tidbit of advice regarding the situation in question, and be clear that the decision stated in the letter is final. Close with a polite greeting and sign the letter by hand or digitally.

Are you stuck on how to write your termination letter? Visme's AI document generator can help! Provide a brief description of the document you need, and the AI will then generate a draft document as per your prompt. You can then customize the draft within our user-friendly editor to ensure it perfectly reflects your specific needs.

Input The Letter Text Into a Contract Termination Template

With the finalized copy, log on to your Visme account and choose a contract termination template. In the section below (anchor link), you’ll find five examples you can use immediately.

Copy the content from your document and paste it into the placeholder text box. Adjust any spacing that seems off and realign any text that is out of place. Follow these design tips for optimal results.

• Use Black or dark-colored text over a white or light background.
• Don’t overlay design elements on or below the text.
• Keep the content aligned following the standard business letter format.

Finalize The Branded Design

After the content is ready, finalize the design of the letter using your brand colors and company information. Add your logo, company name and address. Change the colors of the design elements using the Theme Color feature in the editor. If you haven’t added a branded theme color to your editor, you can do it inside the Brand Kit.

Unify all the text to be the same size and color, and consider increasing the line height minimally if there is too much space at the bottom of the letter. Drag and drop any design elements you want to add to the template, including icons, shapes and backgrounds.

Keep all your documents and visual material on brand with Visme’s Brand Wizard. Take a look at how it works in the video below.

Proofread and Collaborate

Before presenting the letter to the party in question, collaborate with your team or stakeholders to double-check and proofread the content. Inside your Visme business account, add collaborators to view or edit a project. Invited stakeholders can leave comments, edits and thoughts for the final draft.

With the Visme collaboration features, your HR team can work together to create not only contract termination letters but any type of business document. Create contracts, proposals, reports and letterheads together and improve official communication.

Share, Download or Print

Once the letter is finalized, download and print it to send via post or private messenger. Alternatively, the HR department can send a digital document as a PDF or live Visme link. As a link, you’ll be able to track opens and even add password protection to the document.

This second option allows your team to create interactive contract termination letters with links to the contract, company documentation, and other supplemental information.

Turn The Letter Into a Template And Start using Dynamic Fields

Contract Termination Templates are based on a letterhead design. Does your company already use a branded letterhead? If it doesn’t—or it's outdated—this is the perfect opportunity to revise and renew.
Large companies like yours often use documents like contract termination letters. So creating a template with dynamic fields will set the HR team up for fluid and branded communication.

To set up a template with dynamic fields, follow the steps in our support article. This feature allows your team to create a new contract termination letter from the saved brand template and rely on Dynamic Fields to automatically populate the information in the letter without manual typing.

Next Steps After Sending a Contract Termination Letter

After the contract termination letter is sent, there are a few things you’ll need to do. If there were a due date for returning any equipment or company property, you’d need to follow up to see if it has been done. Any pending monetary retributions on either side must be taken care of on the termination date or shortly after.

If the terminated party doesn’t meet settlement agreements, the contract termination letter is legally binding and can be used in court to protect your business.

Contract Termination Letter FAQs

Q. When Do Employers and Businesses Use Letters to End a Contract?

There are several reasons why you’d need to end a contract, for example:

• End of a probation period and no desire to continue
• A breach of contract
• Employee misconduct
• Mutual agreement to terminate
• Completion of contracted time
• Misrepresentation
• Retrenchment
• Redundancy

Simply said, if you have a signed contract with someone and it needs a dissolution, you need a termination of contract letter.

Q. How Do I Terminate a Contract Without a Termination Clause?

If a contract does not include a termination clause, either party may use common law to terminate the agreement. The common rule is that the contract can be terminated with reasonable notice. One party must serve written notice to the other party about the contract's termination. However, what amounts to reasonable notice varies based on the facts and circumstances.

Q. Can You Terminate a Contract Without Notice?

Yes, a contract can be terminated without notice. However, being able to terminate a contract without notice depends on the specific terms and conditions outlined in the contract itself, as well as the applicable laws governing the contract.

In some cases, contracts may include provisions allowing immediate termination without notice under certain circumstances. These circumstances might include a material breach of contract, fraud, or illegal activities by one of the parties.

However, it is generally advisable to carefully review the contract and consult with legal counsel to understand the specific rights and obligations related to termination and notice requirements in a given contractual agreement.

Q. What Is the Difference Between Cancellation and Termination of a Contract?

A contract can be discontinued either by mutual termination agreement between the parties or by automatic termination when all obligations are fulfilled by both parties without any breaches or damages. On the other hand, the cancellation of a contract primarily occurs when one or both parties violate the terms of the agreement or fail to meet their contractual obligations.

Q. How Do I Notify the End of My Contract?

When notifying the end of a contract, it is important to follow the procedures outlined in the contract itself and any applicable legal requirements.

However, there are general steps you can take when notifying the end of a contract.

• Review the contract to understand the specific terms and conditions regarding contract termination, notice periods, and any specific requirements for providing notice.
• Prepare a written notice that clearly states your intention to terminate the contract and specifies the contract's end date. Include relevant details such as the contract reference or identification number, parties involved, and any specific clauses or provisions related to termination.
• Use the appropriate delivery method for providing the notice as specified in the contract, such as registered mail or email.
• Keep copies of the written notice and any delivery receipts or confirmations as proof that you have provided notice in accordance with the contract requirements.
• Seek legal advice. If you are unsure about the specific notice requirements or if the contract is complex, it is advisable to consult with legal counsel who can provide guidance based on your particular situation.

Q. How do you Politely Terminate a Contract

Understanding how to terminate a contract politely is crucial to maintaining professionalism and possibly future relationships. The key is clear communication, adherence to contract terms and a respectful tone.

Here's how you can do it:

• Start the termination letter by thanking the other party for the working relationship, even if it's ending.
• Explain why you are terminating the contract. Stick to the facts and avoid blaming language.
• Focus on the contract terms and any relevant clauses supporting your decision to terminate.
• If possible, and if it suits the situation, indicate a willingness to assist with a smooth transition period.
• Use a professional tone and standard business letter format.

Create Branded Contract Termination Letters With Visme

A termination letter on a branded letterhead is just as official as a regular printed letter, but better. Sharing the news of termination isn’t always easy, but it also doesn’t need to be a pain. With Visme, your team can create branded contract termination letters easily and collaboratively.

Make your documents interactive and professional with all the features Visme has for your business. Use the Brand Wizard to create a full set of templates specially designed for your industry. Your team will have the opportunity to create visual materials that make an impact.

Create a Visme business account today and supercharge your business communication with stunning branded materials.