Termination Letter for Contractor Template Sample & Examples

A termination letter for contractor is written by the contractee when the contractee is not satisfied by the services provided by the contractor. A contractor is a person or business organisation who provides services as per a contractual agreement, and the contractee is the person or business receiving such services. The termination letter in such a case terminates the contractor and contractee relationship.

How to write a Termination Letter for Contractor

Termination Letter for Contractor

Like any other termination letter, a termination letter for a contractor should also state directly that the contract between the contractor and the contractee is being terminated. The termination letter being the formal document and proof of termination. It must be written in a respectful and formal tone and it shall follow all legal guidelines or provisions applicable.

Other than these, specific things to be considered while writing a termination letter to contractor are as follows:

  • Usually service contracts are based upon time, i.e, the contract is made for a specific period of time. Or the contract can also be on individual project basis. 
  • If the contractee wants to terminate the contract, proper study of the terms of the contract is necessary. As the contract usually mentions circumstances under which the contract can be terminated.
  • Terminating the contract by going against the terms usually means, that the one who terminates the contract has to pay compensation to the other party.
  • In the termination letter to contractor, the contractee has to mention the reason for such termination. Details about the circumstances that led to the decision must be communicated briefly and precisely in the letter.
  • If the contractee isn’t satisfied with the services of the contractor. The contractee first tries to provide feedback and urge for improvement in the quality of the services.
  • If the contractor is charging a high price, which the contractee doesn’t seem to be satisfied with, negotiations between both parties take place.
  • It is only if, after all negotiations, both parties still don’t come to a mutual agreement with regards to satisfactory continuity of the contract, the termination of the contract is opted for.
  • Termination letter to contractor shall include the facts about the negotiations that were taken place and the dissatisfaction thereafter.
  • Clear yet concise information about the circumstances building up to the decision of termination shall be a part of the body of the termination letter.

Sample Termination Letter for Contractor

From,
TSR Pvt Ltd
22-B, Rajendra Nagar,
Patna 800016

12 July, 2022

To,
Relationship Manager,
CQ Digital Solutions Pvt Ltd,
41-R, Bankipur, Patna 800004

Subject: Termination Letter for Contractor

Dear Sir,

I am writing this letter to terminate the contract TSR Pvt Ltd and CQ Digital Solutions Pvt Ltd. Wherein CQ Digital Solutions Pvt Ltd was providing services of website maintenance and managing social media handles of the brands of TSR Pvt Ltd.

We have had prior communication before drafting of this letter. About the deals and prices that we are being offered by different digital marketing companies, who are going to use more advanced techniques to bring traffic in our website and social media pages. As well as increase the frequency of our social media posts and engagement.

We had tried to get in contact with you after that, to discuss and negotiate offers among us to enhance TSR Pvt Ltd’s social presence and website design and traffic. Your final price quotation for the updated services was not satisfactory for us. And hence, we are terminating the contract, to shift to another social media and website managing service company.

Our contract was signed 10 months ago in October 2021, and the contract was a one year contract. However, the contract did state that the contractee would get free exit after 6 months after complete. If the contractee doesn’t want to continue the contract services. As per this clause in our contract. We shall not be liable for any compensation for terminating the contract.

The contract shall stand terminated at our end from 16 July 2022, accordingly we request to handover us our website and social media profiles by 15 July. Outstanding payments for the services up to 15 July 2022. It shall be released by our company on or before 20 July, 2022.

We had discussed all of the above details over phone calls, and this decision to terminate the contract from our end was also communicated. This is a formal letter for the same, being drafted and sent as had been requested by you.

Yours sincerely,

Namit Laha,

Director, TSR Pvt Ltd

Sample Termination Email for Contractor

Subject: Termination letter for contractor

From: hr@company.org

To: relationmanager@vendor.org

CC: hod@company.org

Dear Sir,

I am writing this email to formally terminate the contract between YP Foods Pvt Ltd (contractor) and JL Pvt Ltd (contractee), wherein YP Foods Pvt Ltd was contracted to deliver lunch at JL Pvt Ltd’s office for our 89 employees.

Last Friday, 8 July 2022, 15 of our employees had complained of food poisoning after having lunch delivered by your company. We had immediately communicated about the matter on the next day, 9 July. We had received apologies from you for the same, but it is not possible for us to continue with your services, as the health of the employees at the office is of paramount importance for JL Pvt Ltd.

Our contract clearly states that the contractee can terminate the contract any time if the contractor delivers poor quality food which causes any harm to the health of the consumers of that food. However, outstanding payment for the food delivered for the first week of July 2022 shall be cleared by 20 July.

I hope you would understand our stand on the issue, and that our decision is final. The contract stand terminated with immediate effect, and this email is a formal communication of the same.

Yours Sincerely,

Palak Jha,

HR Head, JL Pvt Ltd

Conclusion

A termination letter for contractor, is written by the contractee which cancels or terminates the contract between the contractor and the contractee. The contract terms and conditions are always necessary to be looked into. as a termination of contract which is as per the terms of contract. It will require compensation to be paid by the party terminating the contract. On termination of such a contract by the contractee, the contractee stops using the contractual services of the contractor or service provider. It usually means the contractee is not satisfied with the quality of service being provided. It wants to contract some other service provider for the same services who promise better or more satisfactory service.

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