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The Whys and How-Tos of Termination Letters

Putting an end to a relationship is not that easy. Whether it’s a personal relationship or a professional one, the concept of termination is always accompanied by a mixture of complexity and struggle. In the realm of business management, firing employees is not really a favored practice. However, there are justifying circumstances that give employers the right to do so as part of their management prerogatives.

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Other than employment relationships, business and contractual relationships also end under specific cases. In a lease or tenancy agreement, the landlord or the lessor can terminate the said agreement if the grounds for the termination are existent. In conveying one party’s intention to terminate an agreement, termination letters are utilized as a formal and official correspondence. The said letter must comprehensively cover the reason for the termination and the consequences of such. It must be clearly channeled to the other party to avoid conflicts that may lead to court action.

Nature of Termination Letter

Before writing a termination letter, one must fully understand its purpose and terms of application. Here are some points to factor in when preparing and writing a termination letter.

Subjective Application

A termination letter has varied definitions depending on its field of application. It can be applied in the field of employment, business contracts, professional undertakings, use or lease of personal or real properties, and many more.

Formal in Form

Generally, there are two types of letters referring to the informal and formal letters. In terms of form, a termination letter is considered as a formal letter that follows a prescribed format. The rules and formatting styles that are applied to business or professional letters are applicable to them.

Legal in Nature

Because these type of termination letters deal with the cessation of professional and business relationships, it is inevitable that rights may be affected. For instance, job termination letters must give regard to the rights of an employee to due process. The same rule applies to the other classification of termination letters. There are certain legal requirements that must be complied with before the said letter can validly take effect. In terms rule of law, it would depend on the governing business and labor laws of a country that mandate employers to comply and observe.

These are some of the basic points that characterize a termination letter. In preparing one, you should not forget to factor in the above-mentioned points.

Areas of Application

As discussed above, termination letters are associated and applied to various fields. Some may follow similar procedures, there are still distinctions among them.


In terms of firing employees, termination letters have become a vehicle for employers to convey their intention of ending a particular employee’s employment contract. The termination of employees may either be involuntary or voluntary. Voluntary termination refers to those cases where the employee voluntary and unilaterally decides to end his or her contract with the employer. The other one refers to cases where the employer terminates an employee’s services due to the latter’s commission of acts or omissions falling under the grounds for termination. These grounds may refer to gross misconduct, gross negligence, abandonment of duties, poor performance, and many more.

Lease and Tenancy

Tenancy and lease agreements are executed between two or more parties to safeguard the proprietary rights of the owner of the property within a covered period. It will also spell out the rights and obligations of both parties, the grounds for termination, and many more.

A lessee can validly terminate the said agreement due to the following reasons:

  • failure of the lessor to maintain the sanitary and habitable premises;

  • violation or breach of contract; and

  • other illegitimate dealings that may concern the property.

Bear in mind that both parties have the right to terminate the what was written on the agreement form. The lessor, on the one hand, can duly send a termination letter to the lessee due to three or more successive default or delay in the payment of rent by the latter, if the lessee violates the terms and conditions of the agreement, and if the former has to use to property for specific reasons and after due and reasonable notice given to the lessee.

Vendor- Vendee Relationship

A vendor agreement or contract binds the relationship between the vendor and the vendee. The said document uphold the rights of the contracting parties and the performance of their duties and responsibilities. However, such contracts do not guarantee a smooth-sailing relationship between the parties. It is undeniable that there are certain cases that give the vendee the right to terminate the services of the vendor because of fraud, breach of contract, and other grounds that are sanctioned by law. Like other contractual relationships, the vendee must duly notify the vendor regarding the said termination.

Examples of such grounds are:

  • the financial difficulty experienced by one of the parties;
  • the operations of the supplier or vendor have been disrupted due to disasters. In this case, the object of the contract becomes impossible to perform and thus the other party can terminate the agreement; and
  • violation or breach of terms and conditions of the vendor or service agreement.

Business Agreements

Ideally, business agreements are executed by business persons to attain increased profits and success. However, it is inevitable that some business ventures don’t work out. There are indeed cases that warrant for an execution of a business termination letter. Some of the common reasons why business termination letters are written:

  • Contractual misunderstandings;
  • Negligence of one of the parties to the country such as in the case of delay in the transfer of goods or delayed payment; and
  • Actions and decisions of one party that run afoul with the terms and conditions of the business agreement.

There are still more subjective reasons for such. What is important is that the reasons are stated and explained in the letter with clarity. Other than the mentioned field of interests that termination letters are made use of, there are still more because depending on the circumstances of the parties.

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 How to Write a Job Termination Letter

To give you a substantive and comprehensive overview regarding how job termination letters are written, you may refer to the following steps.

Prepare the needed documentation.

Usually, it is the HR officers that conduct the review and evaluation of the employee’s profile. This is done in order to ensure that all the documentary requirements are complied with and to avoid illegally dismissing the employee. Make sure that the employee was given due process.

Make use of the company or corporate letterhead.

The letter must be printed on a clean sheet of paper with the attached company letterhead. You must include the company address, the date of issuance, and other relevant contact details.

Designate the purpose of the letter and the effective date of the termination clearly.

At the outset, the employee must easily know the subject matter of the letter. The letter must be clearly labeled as a termination letter or notice. Moreover, the date of effectivity of the letter must be clearly provided.

State the reasons for the termination.

It can be very frustrating on the employee’s end if the reasons were not communicated clearly. The letter should state why the management decided to let go of his or her services. For the employers, specifically, it is better that the policy violated by the employee will be duly emphasized and indicated, in cases of misconduct or misbehavior. In addition to this, you need to indicate in the letter that the management has done its part in assisting the employee through interventions and coaching, but still latter fails to rectify his or her actions.

Company properties must be duly surrendered.

You may also use the letter as a tool in reminding the employee to return and surrender the company properties that are under his or her custody, including but not limited to company laptops, keys, any type of equipment, and the like.

Relay concisely to the employee his or her last payment details.

In terms of compensation, it is a case to case basis depending on the reason why the employee got terminated. Generally, the letter will convey when and how can the employee access his or her last compensation.

The simple and relevant points above can guide you in the course of writing a termination letter. Just ensure to take into account the circumstances of the termination case and diligently review the employee’s profile.

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Practical Steps in Writing a Lease Termination Letter

A lease termination letter serves as a prerequisite before the termination of a lease agreement takes effect. The letter will embody the reasons behind the termination and other supporting details. Here are some key points in writing lease termination letters:

Indicate the effective date of the termination.

The letter should clearly state the date that you want the lease agreement to end. This is done in order for the other parties to the agreement to have reasonable time to make the necessary adjustments or question the validity of the said termination.

Concretely state the reasons why you want the lease agreement to end.

Depending on the terms and provisions of the lease agreement, a party to such agreement can decide to terminate it provided that the grounds are reasonable, clear, and legal. All the legal requirements must be complied with.

Affix your signature in the letter.

Ensure to provide your signature in the letter. There are cases that demand the lessor or lessee to notarize the letter and to keep an extra copy of it for record-keeping purposes.

These are simple steps that you may learn from. Just ensure to read and review the provisions of the lease agreement before writing your letter.

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Vendor Termination Letter

How to Write a Vendor Termination Letters

Like other types of termination letter, this letter must be written in a positive and polite manner regardless of the topic on termination. Here some points that you may consider.

Addressed Appropriately

The letter must be addressed and sent to the person authorized such as the manager of the business or any person who acts in behalf of the company or corporation.

Statement of Grounds for Termination

The ground for the said termination must be expressly provided. Examples of such reasons are the following:

  • product or service is no longer required by the vendee;
  • violation of contract terms and provisions;
  • fraud and negligence committed by a party to the contract; and
  • poor business practice.

These are some grounds that you may use depending on the context of your business. The vendor-vendee agreement usually embodies certain grounds for termination. If you’re invoking a ground, be sure to cite it accordingly.

Statement of Gratitude

This is an optional. However, as a business courtesy, it is a good practice to end your letter with positivity and professionalism. You can extend your appreciation to your business partner for their contributions to your success specifically if the partnership lasted for a substantial number of years.

Contact Details

Within the concluding section, you may reiterate your contact details. The contact information are useful if ever the other party has questions and queries in relation to the terminated agreement.

The preceding points are basic guides in writing a vendor termination letter. You may refer to them to enrich your knowledge about the said endeavor.


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Tips in Crafting Effective Termination Letters

Regardless of the type of termination letter that you’ll be needing and working on, you need to consider the perspective of the one reading it. You should put yourself on the recipient’s shoes. In doing so, you will know that in cases of termination, the principles of consistency and clarity is very important to avoid further legal actions. Here are some effective tips that you may consider in writing a termination letter.

Conduct extensive research.

Research, in this case, means simply that the party who wants to initiate the termination must conduct thorough review and discussions. The pros and cons must be discussed. All the factors must be considered. For instance, hastily terminating an employee can bring about negative and legal consequences on the part of the employer in cases that the employee raised the concern to higher authorities.

Use a positive tone.

Even if the subject matter of the letter is termination, it does not give the other party an excuse to be unprofessional and disrespectful. Bear in mind that there are proper authorities and venues that you may raise your concerns. As for the letter, stick to the point. Be decent and polite in outlining the terms of the letter.

Limit your facts and explanations on verified information.

It would be disappointing and unprofessional if you will include irrelevant and unnecessary details. Keep your letter short and succinct. Ensure that the facts are validated and the grounds stated are well-substantiated.

Never ignore the formatting aspect.

In line with this, you need to use a legible and professional font style and size. The appropriate margins must also be observed as well as the indentation of the text. Furthermore, proofreading your letter can help you check if the letter is free from grammar and spelling issues.

These are some tips that you can consider before preparing your termination letter. As much as possible, take matters of termination seriously and diligently.

Modes of Letter Delivery

There are several acceptable means and modes of letter delivery. It depends on the customary business practice of the parties to the contract. For your reference, you may send your letter through the following modes:

Personal Delivery

This is the commonly-used means of delivery, specifically in cases of job termination. The HR officer can easily hand over the letter to the person designated. This is also convenient and cost-effective not just on the employer’s part but also for the employee. Personal and confidential information is also well-secured if the letter is specifically given and handed over to the authorized person.

Mail and/or E-mail

For business correspondence, this type of modes is mostly practiced. For international transactions, sending the letter via post is mostly used accompanied by an e-mail. This is done to ensure that the party will have knowledge about the said termination on the designated date.

In sum, the parties can avail of any mode which they consider as convenient and secure. In choosing a mode of delivery, they have to consider critical points such as security, time aspect, and the degree of urgency of the said transaction.

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