Agreement Cancellation Explained
An agreement cancellation can be defined in many ways, such as terminating a mutually accepted proposal, rejecting an offer made, rescinding a signed contract, or simply stating that a deal is off. Many people or businesses may need to cancel an agreement, contract, or arrangement. For example, a business may decide to no longer hold a third party or trusted neighbor responsible for an agreement to exchange services or other material like one party providing maintenance on the other’s business equipment to ensure smooth operation. The terminated agreement can be a simple matter of choosing to end the arrangement, but it helps to document the cancellation.
When you break the agreement or cancel it, you are essentially voiding it and agreeing that no action will be expected or taken in reference to either party’s obligations. Circumstances around mutual agreements or obligations can be very complicated and may require that the parties perform several steps to cancel the deal. However, in other cases , it may just be a simple matter of a letter to an agreed vendor to purchase the goods for your business. A party may find themselves wanting to rescind their acceptance of a proposal because the procedure or fulfillment failed to meet the expectations outlined in the initial agreement. Ultimately it helps to understand why an agreement is all-inclusive and can only be modified if both parties work together to make amendments to the original terms.
When an agreement cancellation occurs, a person or entity must follow the appropriate steps in order to formally terminate any expectations or responsibilities that were previously discussed or agreed to. Although the process depends on the way in which the agreement was structured initially, it still should be documented to avoid further complications. This procedure typically includes some steps such as notifying the other party of intent to cancel, informing the other party how to properly cease the arrangement, sending a formal cancellation letter, and submitting a copy to any relevant courts or institutions if there is a legal component to the agreement. Understanding the details around the requirement for a formal process can help in the future when you are engaged in an agreement that may need to be canceled.
Agreement Cancellation Letter Checklist
Agreement cancellation letters commonly include the following three elements:
Subject Line: The subject line states that the letter is a Cancellation Letter. The intent is to provide the reader with instant recognition of the purpose of the letter.
Dates: Dates inform the reader of important dates in the events leading up to the termination of the agreement. The date the cancellation letter was drafted should be on the first page of the document.
The last page of the agreement should be marked with the current date as well. For example, if the agreement is to be terminated by the end of the month, both the cancellation letter and the agreement should be dated the last day of the month. This method helps the parties remember the cancellation date should anything go awry later on.
How to Write an Agreement Cancellation Letter in 8 Steps
To avoid confusion, it is best to start with the easiest step. The first thing you must do is to state who is canceling the contract. It could be you or the person or entity on the other side, but this must be clearly explained in the first part of the letter.
The next step is to describe the contract that is being canceled. For this, you will need to fill in some details such as the contract type, signatories, date signed, any identifying numbers, and anything else that would allow it to be easily identified. This section should be placed in the middle of the agreement, after identifying each of the parties.
Even if no specific reason for the cancellation is required, it is always a good idea to explain why the contract is being canceled. If your reasons are persuasive, the other party may agree to void the contract without any further action.
Once you have explained the circumstances, include the cancellation statement. It can be something as simple as "This letter serves as notification that [party] is canceling the [contract type] between [party A] and [party B] as of [date]" or "This cancels the [type of contract] between [party] on the grounds of [reason]." Follow that with a termination date.
If there is any additional content that you would like to put into the cancellation, any future agreements that you would like to include, such as transfers of assets or certain actions that the other party must abide by after the contract is voided, include it at the end of the letter.
You should always thank the other party for their cooperation in canceling the contract or for their previous service, and be sure to include your contact information so they can get in touch with you.
Agreement Cancellation Letter Do’s and Don’ts
When drafting a cancellation letter, even the smallest mistake can lead to significant consequences. To ensure that your cancellation letter is effective, be sure to avoid these common mistakes:
Mistake #1: You don’t mention where in the contract it states you can cancel your agreement under the terms of the contract.
Mistake #2: You don’t explain to the other party why you are sending the letter. It’s important to outline your reasons for cancelation in your letter.
Mistake #3: You don’t make a copy for yourself. When you sign the letter, make a copy for your records.
Mistake #4: You rush into sending the letter without taking the time to carefully review it. It’s essential to take your time and carefully read over the entire letter while checking for any errors.
Mistake #5: You use difficult-to-read language. In order to be effective, a cancellation letter must be clear and concise.
Agreement Cancellation Letter Template
[Your Address]
[City, State ZIP Code]
[Date]
[Recipient’s Name]
[Company’s Name (if applicable)]
[Company’s Address (if applicable)]
[City, State ZIP Code (if applicable)]
Dear [Client/Service Provider’s Name or whoever it is written to],
This letter is to inform you that I wish to cancel my contract or agreement to [insert the nature of the contract or agreement to be cancelled]. To that end , please consider this letter as a formal termination of our contract or agreement.
Please note that the last date of the contract or agreement will be [insert date]. Please confirm that you have received this letter, and that you have taken the necessary actions to cancel the contract or agreement per our specified last date. Thank you very much.
You may contact me at [insert contact number] should you have any questions or concerns related to this matter. Should you need to reach me, you may also send an email to [insert email address].
Sincerely,
Rebecca Black
Agreement Cancellation Letter Legalities and Ramifications
While drafting an agreement cancellation letter, it’s important to have the proper information to make it legally binding. In order to address all the necessary details of an agreement, some may require the signature of the party cancelling the contract. If this is not addressed, a person could face a breach of contract lawsuit. However, some agreements do not require a signature, yet should still be sent out properly. By following some basic rules, you can avoid the issues that could occur if you do not do so.
The most important thing to remember when cancelling a contract is to provide notice of cancellation in the manner that was outlined within the contract. If a contract states that any termination must be done via certified mail, adhering to the request is important. A breach of contract suit could occur if the contract is not terminated as discussed in the agreement.
By not cancelling the contract according to the terms within it, a lawsuit could be filed against the person wishing to cancel the contract for not delivering it properly. However, some cancellations do not require this kind of attention to detail. A partnership agreement with a buyout clause does not normally require an exact process for termination and can be done by simply sending a letter with the intent to cancel.
Although it could be necessary to employ the assistance of a legal professional to draft an agreement cancellation letter, many of these letters can be created without the assistance of a lawyer.
Agreement Cancellation Letter Delivery Best Practices
Delivering the letter of cancellation is the next step after creating a properly formatted letter. There are several options when it comes to delivering a cancellation letter, and each has its pros and cons. The three most common methods for delivering a cancellation letter include in person, by email, and via certified USPS mail.
In-Person: It is most beneficial to deliver the letter of cancellation in person. Perhaps you are not on good terms with the individual or organization you are attempting to get out of a contract with, making a face-to-face delivery awkward. However, this method is a hassle-free approach to ensuring they received it, as you can have them sign something to signify their acceptance of the cancellation letter form. In fact, an email version of your cancellation letter could be sent as an "attachment" then you could request a "read receipt" to cover your bases and prove they saw it .
Email: Emailing the cancellation letter is a quick and convenient method, especially if the two parties live far apart. However, unless you get a "read receipt" or they physically respond to the email, you may not have any proof or evidence that they ever received it. Sending the cancellation letter as an attachment may increase the chances that they will see and receive the email and reading it.
Certified USPS Mail: A certified mail delivery will give you a receipt once it has been delivered along with a tracking number providing you with a timeline for when it was sent and when it was received. While this option may be more expensive, it also helps to give you significant peace of mind seeing as you cannot trust everyone to be honest.