Wednesday, October 31, 2012

Vendor Termination letter format

Hi Friends,


Normally when we enter into contracts with any vendor, the contract period is clearly defined and mentioned but sometime, we need to end the contract before the said period. 

In any case, it is always advisable to send them the contract termination letter. 


The letter should mention effective date of termination of contract, time to settle the final amount and expressly disallowing them to use your company name and logo (if not mentioned in the original contract, even if it is mentioned, please mention it again)



Why?



1. There may be charges for contract period, if you do not mention the termination effective date the bad vendors may charge you for the period

2. The vendor's service may not be satisfactory but he/ she may use your brand name and logo to show you as a client and it will be misused (usually if a vendor has good name in its client list, naturally other organisation will think to give business)
3. Why statutory payment deduction- because if you have hired a contractor providing labour on contract basis and he defaults any statutory payment like PF, ESIC, principle employer is liable for the default.


I hope you will find this useful.


Please see the format 


August 16, 2012

To
Name
Designation
Company

Dear Mr… (you may choose first name or last name),

Sub: Termination of your Vendor Contract for supply of …………..

Ref: Our Vendor Contract dated …………………… (mention date)
Please note clause no.s and sub clause mentioned in our contract dated ……………………………
On the basis of the clause, we would like to inform you that our contract stands cancel w.e.f. ……………. (mention effective date) on following ground:
1.
2.
3.

(mention ground for termination it can be dissatisfactory service, violation of terms and condition mentioned in the contract, poor service or supply, end of the contract or no further business need)
Kindly submit your all full and final settlement bil with all supporting in original. We will verify our records and your accounts will be settled within 30 days of last date of contract subject to submission of full and final settlement bill alongwith original supporting.

Please note that the amount will be subject to deduction of statutory payment (if any).

Please note that you are not allowed to use our brand, logo, name and any material related to our organization, associated or partners without written consent from us. Violation of this may lead to all available course of action to protect our organisation’s vested interest.

Thanking you.

Yours truly,

……………..

Name
Designation
Company

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