A vendor termination letter template is a formal document written by a business owner for terminating the contract with the vendor because of any discrepancy in the supply of goods. It is written due to the supplier’s default to meet the contract’s terms and conditions. However, a business owner can cancel the contract by phone but follow the cancellation with a termination letter in a formal way. This act looks professional and also keeps you safe from any other legal confrontation.
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Reasons for issuing a vendor termination letter:
A vendor termination letter may be issued for various reasons. Some of them are as follow;
- When either the company or vendor is facing the circumstances in which they are unable to complete the contract, then the contract can be terminated by writing a termination letter under the impossibility of performance.
- Fraud and scams are the leading cause of vendor termination letter template. If you see that the vendor is involved in deception or any fraudulent activity, then that is the strong reason for writing a termination letter for him.
- Moreover, the vendor termination letter is also written when both the company and the vendor involved in the contract under a mistaken assumption.
- When the vendor fails to meet the terms and conditions of the contract after entering it, then the company legally terminates the contract by issuing a termination letter to the vendor. Hence, to avoid a violation, both parties should read the contract obligations thoroughly before signing the contract. You should also check Real Estate Contract Termination Letter.
How to write a vendor termination letter?
Let us discuss step-by-step how to write an effective vendor termination letter;
At first, start with the company letterhead. You have to include the company’s letterhead at the top of your letter. Additionally, this section includes the company logo, the address, contact details, and the date of writing.
Next, provide the recipient’s details. Here the recipient will be the supplier or vendor. So, address formally the manager in charge of the supplies by mentioning their names, address, and official contacts.
After addressing the recipient, start a letter using an official salutation of greeting.
Then, there comes an introductory paragraph. In this paragraph, you have to mention the reason that why you are writing the letter. Also, write the date of termination. Furthermore, state the reasons clearly that why you are terminating the contract.
Now, write the body paragraphs. The body of the letter emphasizes an in-depth illustration of the termination of the contract. Here you can also specify the certain sections of the vendor’s contract that reinforce your termination. In addition, if you have the outstanding statements then you must include them in the letter.
After that, close your letter by thanking the vendor for his services. Also, state that you can welcome any questions or concerns from the vendor.
In the end, add your name and contact details and affix your signature to make the letter valid. You may also like the Employee Contract Template.
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Things you should keep in mind while writing a termination letter:
Here are some keep points that you must keep in mind while writing a letter;
- The letter should be precise and to the point. Don’t make it lengthy and avoid being too wordy.
- As it is a formal document so use a polite and professional tone. However, if the reasons for termination are poor product delivery, contract violation, etc you have to remain positive while expressing your anger.
- Discuss the reason for termination in detail. You should use simple language that can be easily understood by the vendor. You may also see Supplier Scorecard Template.
- Most importantly, mention the date of termination in the letter.
In conclusion, a vendor termination letter allows you to cancel the contract with the vendor in a professional way. The letter should be well-written and contain polite and professional language so that vendor understands it easily.