This post covers cancel a contract letter.
A contract cancellation letter is frequently prepared when an arrangement between you and another company does not work out. If you no longer require the services of an entity or you are dissatisfied with how an entity is carrying out a contract, sending a cancel a contract letter will help you in safely exiting the contractual agreement.
I know you might have a lot of how and what questions- what to say, how to say.
In fact, knowing what to say—and what not to say in a letter to cancel a contract can be difficult, especially if you aren’t in the practice of canceling commercial contracts.
I think It’s useful to have a guide to follow so that you can quickly adapt to your specific situation.
Here you will learn everything you need to know about canceling a contract, specifically, I will cover;
- What is Cancel a contract letter
- Why you should cancel the contract?
- How do you write a letter to cancel a contract?
- Cancel a contract letter sample
What is Cancel a contract letter
A letter for canceling a contract is a brief statement of facts written by either party to the contract to formally express his/her intent to terminate all business dealings with another party with whom he/she has previously entered into an agreement or contract.
A contract cancellation letter acts as an official letter of contract termination. It is essential when a written record of how and when the contract was ended is required, or if a contract must be terminated in writing.
Through this letter, you’ll have proof if the other parties claim they never received notice of termination.
Why you should cancel the contract?
Most contracts require you to perform your obligations as agreed. That may imply that you are unable to cancel the contract until it is discharged or it is time to renew it.
However, there are some reasons why you should cancel before the contract period expires.
The following are reasons that justify why you should cancel the contract
- When the contract is frustrated. This happens when the contract was not performed due to the reasons beyond parties’ control, for example when your business is devastated by an earthquake
- When the other party has not yet honored its contractual responsibilities
- When you have entered into a contract by undue influence- fraud, misrepresentation, mistake, etc.
- When the conduct of other parts indicates that he will not perform the contract (anticipatory breach)
- When you are dissatisfied with the product or service of the other party
When you find yourself in any of the situations explained above, and you feel that are ready to cancel a contract, write a contract cancellation letter.
How do you write a letter to cancel a contract?
A contract cancellation letter is written in business letter format. Begin with your address and contact information, followed by a date and the recipient’s address, then greet the recipient and begin your letter by indicating that you are writing to terminate the contract, enter the details of the contract, and explain the grounds for cancellation. Close your letter by leaving room for more queries. Log out with “Sincerely,” your signature, and your name.
When drafting your cancellation letter, keep in mind that the purpose is to make a clear and concise request to end the commercial relationship between you and the other party, leaving no room for misunderstanding.
So to write the effective cancel a contract letter make sure you observe the following
- Maintain a professional and neutral tone when writing a cancellation letter.
- Keep it simple, direct, and to the point.
- Make reference to the contract no. and contract date
- State the main objects of your contract
- Declare clearly that you are canceling your contract and your reasons to do so.
- I think you should be very careful here, Even if the reason for your cancellation is poor service, do not write a prolonged complaint letter to the company. Never turn your cancelation letter into a complaint letter.
- State the effective date of your cancellation
Wait! You didn’t hear the best part yet!
What’s the best part? Read your contract carefully before canceling.
Some contracts contain clauses that allow you to terminate, while others do not. For example, a contract may cover a specific period and allow for early termination only if you receive unsatisfactory service.
Other contracts require you to serve a notice of termination (of course this letter also serves this purpose) within a reasonable time- 30 days, 45 days, 60 days, etc.
To be on the safe side make sure you read and understand the termination clause of your contract and comply with it. Otherwise, your attempt to cancel the letter will be termed a breach of contract.
Format/template of a letter to cancel the contract
Your letter to cancel a contract should take the following format
- Your Address
- Recipient address
- Subject line
- [opening paragraph]- A statement that you are writing to cancel the contract
- [body paragraphs]- The reasons you are canceling your contract, a statement that you will fulfill your obligations until the date specified, and accept any outstanding products or services.
- [closing paragraphs] – provide avenue for further questions
- name and signature
Cancel a contract letter sample
100 West Street
Downtown, TX 45689
December 30, 20…
Chief Executive officer
201 Long Street
Downtown, TX 45689
Re: Notice to cancel our contract No. 01 of January 30, 20…
This is to inform you that I am canceling our internet services contract number 01, dated January 30, 20…
I understand that my current contract expires on March 30, 20…, three months from now. This letter serves as 30 days’ notice that I will not renew my contract after its term.
My internet service is frequently down, and when it is available, it is slow. Your technical support staff was unable to resolve these problems. As a result, I am terminating the contract effectively from March 30, 20…
I have been pleased with our prior relationship and it is my wish that we part on good terms. I have decided to try other internet service providers with more stable and reliable services.
I intend to fulfill my contractual responsibilities until March 30, 20…
Please contact me at firstname.lastname@example.org or (555)-111-1111 if you have any questions.
Letter to cancel a contract
[your mobile number]
Dear [recipient last name]
We are writing to inform you that as of [date], we will no longer require the services of [name of firm]. We have met the minimum notice period required by our agreement with this letter. Your company had previously provided us with excellent service; but, we have decided to discontinue our business agreement because [reasons].
Our company will no longer place orders with your company as of now. We will not cancel any orders or deliveries made before this letter unless we specifically notify you. Ideally, any outstanding orders should be completed before our contract expires. We will settle any outstanding balances in our account by [date]. As a result, we’d want to receive all necessary bills by [date].
Please acknowledge receipt of this letter as the termination of our contract and closure of our account. If you have any questions, please contact me at [phone number] or [e-mail address].
Again we’d like to express our gratitude for our long-standing relationship.