Template letter mutually agreeing to terminate a contract

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What's a template letter mutually agreeing to terminate a contract and when do you need it?

If you and someone else with whom you’ve signed a contract both agree that you want to bring that contract to an end, you can use this template letter to achieve that.

The draft is intended to cover the situation where you’re both agreeing to this termination outside the strict terms of the contract. If you’re ending the contract by relying on termination rights already available within the contract, then you can simplify this letter to say:

"Please treat this as the required [TIME PERIOD – e.g. 3 months’] written notice of termination, according to Clause [X] of our agreement. The agreement will therefore end on [DATE]. This means that… [you should then outline what the contract describes as the consequences of this permitted, unilateral termination]."

The template won’t be appropriate if you want to terminate an existing contract and the other party does not want to do so. Often, where these circumstances arise, the reason for wanting to bring a contract to an end is because the other party has breached it.

If you’re in this situation, the communication you need will be a letter that is sent from you, threatening to terminate the contract, if a breach of the contract is not remedied within the time frames and according to the terms set out in the contract between you and the other party.