In different kinds of business arrangements, it is necessary to make and sign business contracts in order to make the deal official. Of course, you can say the same in the case of breaking the deal. As a matter of fact, you can use tools like letters of termination in order to officially end a business agreement before the established ending period for any appropriate reason.
Of course, like with many other document examples, you can use templates to make your work easier, in this case, contract termination letter templates. This can provide you with a number of conveniences that should give you plenty of incentive to rely on the templates. After all, the very purpose of a template is to make it so you need not make documents from scratch.
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Kinds of Official Termination Letters You Can Use
When most people think of termination letters, the first thing that comes to mind might be employment termination letters. While that is a fairly common type, that is not the only one. In fact, termination letters can generally be used to end any kind of business agreement, not merely those relating to employment. Some of the possible types of termination letters include:
Lease Termination Letters
This kind of termination letter is used in order to end a lease agreement, which usually has to do with renting a particular property from a landlord. Like an employment termination letter, a lease termination letter may not necessarily have to with misconduct, as it is possible to cancel the agreement due to changing circumstances such as a desire to move to a different location or for financial reasons.
Employment Termination Letters
As can be inferred from their name, employment termination letters are used in order to terminate an employee agreement. In other words, these letters are generally used to dismiss employees, usually for reasons such as misconduct, poor performance, or others. Of course, it is possible for employees themselves to send their own termination letters so as to end their employment themselves. This can be due to such reasons as finding a better offer, a desire to find another line of work, retirement, or others.
Service Termination Letters
Similar to employment termination letters, service termination letters allow for an end to a business relationship between two different parties. However, the distinction is that a service agreement operates when one party chooses to patronize the other for particular services, such as catering, deliveries, etc. This kind of termination letter can be said to end relationships between equals, rather than reflect a distinct hierarchy, as is the case with employment and lease termination letters.
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Functions of Official Termination Letters
Different official documents generally have particular functions that they need to carry out. In the case of termination letter templates, you can see this in the documents’ formats. In any case, some of those functions you need to keep in mind when making your own letters include:
The most basic function of any letter is to inform the recipient of some kind of news. In this case, these letters serve as notices of termination so as to inform the other party of the fact that their arrangement is being terminated. In many cases, it is a basic requirement to send such letters in the first place, being that it is often required by law.
In the case of even simple termination letters, it is often considered good form to send letters for the sake of basic etiquette. After all, in many cases, these letters also include a notice period in order for the other party to get their affairs in order. This allows employees and tenants a window in which they can collect all their belongings, and possibly find new arrangements for themselves.
Another function of the notice period is to provide fair warning of the fact of the agreement’s termination. Announcing the termination serves to keep the other party informed so as to avoid their being caught by surprise by the termination. This transcends simple politeness, as it can serve to preserve the relationship between both parties in case of any other arrangements they may make in the future.
These letters may also be sent for security purposes, especially in the case of lease and employment termination letters. After all, a certain level of trust is a basic requirement in such agreements, and if that is broken then the offended party needs to terminate the agreement and state as much. Such letters may, because of the security risk, come into effect more immediately than normal, but the extraordinary circumstances may make that understandable.
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What Actions Merit Sending a Termination Letter
In writing different kinds of termination letters, it pays to know exactly what kinds of actions merit termination of contract. After all, there are certain actions that, if they occur, can deserve your sending a termination letter to address the issue. Naturally, these different types of termination causes can apply to each kind of contract in general.
Completion of Contract
When sending a termination of services letter, you might do so precisely because the terms of the contract have already been fulfilled. If you were to, place an order for a delivery, the terms of the contract can be said to be fulfilled when you receive the order and the seller receives payment. In such a case, the contract is ended as soon as both parties’ obligations are discharged, allowing you to send a letter informing the other party of it.
This can be seen in employee termination letters, as well as other examples like tenancy termination letters. In such cases, it is possible to end a contract early in cases of misconduct such as negligence, disobedience, etc. This can apply to employees or tenants, as the contract implies that the management or landlord have power over them, which would also imply a subordinate position of some kind.
Breach of Contract
In cases of breach of contract, one party fails to fulfill some part of the contract, or even interferes in the other party’s ability to fulfill their obligations. In a tenant’s case, tenancy termination letters would be an appropriate measure, since a breach of contract might take the form of violating terms such as property damage, keeping pets on the premises, etc. Like misconduct, it would be necessary to send a termination letter so as to protect yourself.
In an office setting, it may be necessary to send these kinds of letters for the sake of maintaining discipline as a whole. In these cases, termination would be something of a last resort. However, if disciplinary issues persist in spite of management’s efforts, then it might be best to terminate the agreement. After all, if you want a productive office environment, such a course of action might be necessary in order to keep up productivity.
As part of maintaining discipline, it is possible to terminate a contract in case of the other party being a disruptive influence. This can take the form of an employee who disrupts productivity, or a tenant who damages the property or causes noise. In such cases, it might be necessary to terminate the agreement so as to remove such parties and save yourself unnecessary difficulties.
A contract may also be terminated if it is literally impossible to fulfill the terms of the contract. This is applicable in cases where unforeseen circumstances make it impossible for one party to comply with their commitments. In such cases, it is possible to cancel the agreement without any legal repercussions. One example would be a business contract on placing an order for specific food items, only to be informed that there was sudden unavailability due to sickness. In this case, it is possible to simply terminate the agreement without consequence.
If one party in an agreement is found to have been less than completely honest concerning one term of the contract or another, it is possible to terminate the agreement on grounds of bad faith. After all, if one party is not honest with the other party, then there is no trust, and therefore no foundation of trust to enter into the agreement. The deceived party would be well within their rights to terminate the agreement or even press charges.
A contract itself may also contain clauses on how to end the agreement early if certain conditions are meant. This can serve as a defense mechanism for both parties, so as to protect themselves from misconduct on the other party’s part. In this case, it would be possible to terminate the contract without fear of legal action being taken against you.
Change of Circumstance
As a less drastic example, it is also possible to end an agreement, possibly even a long-standing one, if there are different circumstances that demand that you find alternatives. For example, you could use partnership termination letters to end an agreement with your business partners if you are no longer capable of carrying out business with them, not necessarily because of any misconduct on anyone’s part.
Hopefully, you ought to have a better idea of both how to make such termination letters, and what you need to use them for, in case you ever need to write your own at any point in the future.