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What is a Termination Agreement

A termination agreement is a written document used to officially record that cancelation of a contract has been agreed by all parties engaged in a contract. It is used whenever a client or the other party is no longer satisfied with the service or performance of the other. With that, you can send them a termination agreement, requesting to end the contract. Both parties need to agree before you can fully announce that the contract is now canceled. Termination contract comes in different types such as mutual termination, employment termination, voluntary termination, divorce agreement, lease termination, and many more.

How to Write a Termination Agreement

Termination agreements do not only mean as a cancellation of partnership, but it also means that there is a change of relationship or services on the contract. Whatever the reason might be, writing a termination agreement needs to be in a formal tone all throughout the content. No need to worry because we have provided steps below so that it will be easier for you when you write the termination agreement.

1. The Introduction

This part includes the legal name of both parties, it would be better if you write both the name and the company name if ever they are part of a company. You also need to write on this part the original date of contract termination. The names written here should match the names that were written on the original contract.

2. The Recitals

You will write here the original contract date together with the clause that will support you in terminating the contract. You need to indicate the right clause to justify your termination. Along with this part is the copy of the original contract.

3. The Sections

The longest part of the basic agreement will be here, this part contains twelve sections, namely Termination, Mutual Release of Liability, Return of Goods, Confidential Information, Non-Disparagement, Covenant Not to Sue, Governing Law, Counterparts/Electronic Signatures, Severability, Entire Agreement, Authority, and the Headings. Make sure that you have written all these sections on the agreement. To avoid stressing yourself, you can look for a termination letter sample online or just download our templates above.

4. The Witness

To make the agreement legal, you need to have a witness that will certify that both parties have agreed on the termination. You need to make the witness put their sign on the agreement document to make it more reliable. At least two witnesses will be much better.

5. The Agreement

After you have found a witness and let them sign on the documents, both parties need to read the agreement again and make sure that you have agreed on what is written. Reading again will help you find grammatical errors and most especially will clarify that the contract is going to its end. When both are done reviewing, it is time to sign the papers together with the date of the day.