Letter of termination of contract

A letter of termination of the contract is a document through which one contracting party informs another that the contract is terminated before both parties have completely fulfilled their contractual obligations. It is typically used when one party wishes to terminate the contract due to a breach of the contract by the other party or due to other reasons specified in the contract.

When a party becomes entitled to terminate because of the breach or some other intervening factor, it is confronted with a decision legally classed as ‘election’, where the aggrieved party has the options to either affirm the contract or terminate it.

If the party elects to terminate, they must send a letter or email giving notice of termination to the other party. After termination, the parties are discharged from their remaining obligations to perform under the contract.