Writing a Construction Contract Termination Letter [Free Sample]

Being forced to write a construction contract termination letter can be frustrating. That’s true for people who work in the industry and have experience with such matters and for individuals who hire a contractor to do some construction work on their property and have never had to write a termination letter before.

The good news is that such a letter does not have to be long or complicated. However, it is important to ensure that the letter complies with all relevant sections of the original contract.

Conditions For Termination

When a construction contract is written, it may contain various stipulations regarding the conditions under which termination of the agreement is appropriate. 

For instance, it may state that the contract can be canceled as a result of faulty workmanship, excessive delays or otherwise not meeting the expectations of the other party.

notice of intent

Moreover, most contracts define precisely how they can be terminated. It’s not uncommon to see contracts requiring written notice of an intent to terminate, which is where the need for a contract termination letter comes in.

Before sending such a letter it’s essential for the canceling party to carefully review the contract in its entirety. That’s because terminating a contract may involve several more steps that must occur before the letter is sent.

Wrongful Termination

If these steps aren’t followed, then the other party may be able to sue or otherwise hold the canceling party responsible for wrongfully terminating the contract. 

It may make sense to have an attorney review the contract before writing the letter to make certain that all of the necessary cancellation steps have been met.

Notice Of Dissatisfaction

For instance, a construction contract may say that the contractor has a certain time period during which they must try to cure a defect or deficiency in their work. 

In such an arrangement, the customer provides notice of their dissatisfaction, and once the contractor receives it a predetermined time period begins counting down.

Perhaps it’s seven or 14 days or more. Regardless, the contractor must work to correct any problems within that time period or risk being sent a termination letter. 

The customer would not be able to terminate the contract before the expiration of the that time period without risking litigation or other adverse actions on the part of the contractor.

no way to salvage the contract?

Once the customer is certain that there is no way to salvage the contract and they are sure they have met all applicable terms in the contract, they are free to write a termination letter. 

It’s best to keep such communications professional and succinct. However, details regarding why the contract is being terminated may prove useful.

Termination letters should be printed in black ink on typical eight-and-a-half by 11 paper. While not every termination letter requires the recipient to sign and return a copy, it may be helpful to have this confirmation. 

Certified mail

Alternatively or additionally, the sender may opt for certified mail, which at least provides a confirmation of receipt. 

A copy of the letter signed by the recipient or a signed certified mail receipt may prove helpful in case there is a later dispute about the termination and the sender has to prove that proper notification was made.

The following sample construction contract termination letter is a basic template that can be easily customized to fit a variety of circumstances.

Construction Contract Termination Letter Sample

LETTERHEAD

May 23, 2021

Name of Recipient
Name of Company
Address of Company

Re: Construction Contract Termination

Dear Name of Recipient:

This correspondence is sent in accordance with sections 6 and 7 of the contract between SENDER and RECIPIENT. Over the last two months, it has become clear that the construction project at (SENDER’S ADDRESS) is not going to be finished with the efficiency and quality that were promised in the original contract. Accordingly, RECIPIENT is hereby notified of the termination of this contract.

Specifically, SENDER became aware on DATE of certain defects in the quality of the cabinetry and counter tops that were installed at the above-mentioned address. RECIPIENT was informed of the problems the same day.

In accordance with the terms of the contract, RECIPIENT promised to fix the issues within 30 calendar days. It is now 15 days after the expiration of that 30 calendar day period, and no further work has been completed.

Sections 6 and 7 of the contract stipulate that SENDER may terminate the contract if issues brought to the attention of RECIPIENT are not resolved within 30 calendar days.

Accordingly, this contract is terminated, and SENDER is not responsible for any balance due to RECIPIENT. Please sign a copy of this letter and return it to us within seven days of receipt.

Very truly yours,

Signature
Name of Sender

Disclaimer: This post is only for informational purposes and does not intend to replace expert legal advice.

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