What is a Contract Termination Agreement?
A Contract Termination Agreement is a document that legally states that all involved parties have agreed to end a previous agreement.
Two parties can decide to sign a Termination Agreement Contract when both have concluded that their previous agreement has not yielded the desired effect. Usually, parties that file this agreement want to terminate an agreement prematurely.
While parties can refer to termination clauses in some agreements, other agreements do not have this. Hence, the use of a Contract Termination Agreement Template is advisable. This agreement makes the termination of another agreement formalized and states that both parties have agreed to this termination.
Many things can prompt the use of a Termination of Contract Agreement Template. However, the most general reason for its use is a breach of contract, meaning that one of the parties has not upheld the terms of the agreement.
Parties can also use a contract termination agreement due to a loss of trust. While not necessarily a breach in contract, both parties can still enter a contract termination agreement when they have lost faith in the other party. Either through mistrust or a general dislike, both parties can declare that they do not wish to continue their contract.
How to fill out a Contract Termination Agreement?
For people who want to terminate their contract formally, a Termination of Contract Agreement PDF copy is available at any online legal database to download and print for you to fill out manually.
You can also fill out the form electronically on PDFRun.
Filling out the form
The opening paragraph of the form requires you to input the date that the agreement is made (to be called the “Termination Date”) and the complete names and addresses of both parties involved (to be called “Parties”).
Then, you must input the date that the agreement to be terminated(to be called “Agreement”) had taken full effect. In addition, enter the reason for this termination in a concise description.
After this paragraph, read the terms of the termination thoroughly.
This section highlights the primary purpose of this contract termination agreement and how it will work. It states that the Agreement will be terminated and therefore will have no further effect on both parties as of the Termination Date. However, any ongoing obligations and obligations that survive the termination of the agreement will be kept in full effect.
- SURVIVING OBLIGATIONS
This section is a clarification of the latter part of Section 1. It highlights that both parties will keep obligations that survived the termination of the contract. This type of obligation comes from a survival clause in the Agreement, which makes another clause continue after termination.
This section details that both parties cannot take any legal action against each other relating to the Agreement. This clause also applies to the parties’ administrators, executors, representatives, successors, and assigns.
This section informs the parties that notices (and any form of written communication) sent through the methods below are the only ones considered given properly:
- By personal delivery (includes delivery services)
- By electronic means (e-mails and fax)
- By certified or registered mail (Input the mailing address of both parties)
Meeting any of the following conditions means that you have given the written notice properly:
- Five days since the sending of the notice
- Two days since the sending of the confirmation notice
- Actual receiving of the notice
To confirm written notices given through email or fax, you must send a copy of it through certified mail.
- SUCCESSORS AND ASSIGNS
This section notes that this document is binding. Furthermore, it also affects the benefits of both Parties’ respective successors and all assigns related to the Agreement.
- ENTIRE AGREEMENT
This section reflects the understanding of both parties that the document is for the termination of the Agreement. In addition, the parties must also understand that this document merges all agreements made concerning the termination of the Agreement.
Amendments and modifications to this document can only be effective if both parties give mutual approval by signing it.
If a section of this document is deemed invalid or unenforceable by a competent court of jurisdiction, the rest of the agreement will be kept in full effect. In this case, the parties must negotiate a valid substitute clause to replace the invalidated one.
This section states that both parties can sign the document in separate copies. Both of these copies are considered original. Together, they constitute the same instrument.
- GOVERNING LAW
The document must follow a specific set of state laws. Indicate in this section the state law this document will follow. The state law will govern, interpret, and construe the document.
Input your complete name here.
Affix your signature and the date of signing here.
Input the complete name of the other party here.
Affix the signature of the other party and their date of signing here.
Reminders for filling out the Document
Consult a Legal Professional
When filling out documents like the Contract Termination Agreement, it is good to consult a legal professional to make the document as sound as possible. Consulting can make negotiating much easier as you will have a reliable source of information on what you can and cannot do. A legal professional will also help your document become compatible with state laws.
Notarize your Agreement
There are times that parties misinterpret agreements like this. As such, conflicts often arise, making it more complicated. Thus, to protect the interests of both parties, it is advised to have your agreement verified by a notary public. Verifying your document will let you prove that the termination is authentic as it confirms that both parties have agreed to it. The verification will also counteract any denial of the document’s existence.