A consultant is an individual who provides expert or professional advice in a particular field of business or science to either an individual or an organization. They provide the expertise that a client lacks or support that the client is unable to fulfill. However, there comes a time when the client may find their work not according to the standards they had agreed on, or they simply don’t require their services anymore. In which case, they will have to terminate the agreement they made with the consultant. To do this effectively, they will have to craft a great termination of consultancy agreement letter to inform the consultant that their services are no longer required.
A termination of consulting agreement letter is a letter written to the consultant, informing them that their services are no longer required. The letter is drafted to show the consultant the proper treatment that is afforded to a regular employee.
Despite the fact that consultants are not permanent employees of a company, it is still essential for the HR department and the business owner to terminate them with utmost professionalism and tact that they would use on their permanent employees.
Termination of contract agreement is a legal contract signed between the two parties, i.e., the consultant and the organization/individual, wherein the services of the consultant are terminated.
The letter serves to show the end of a partnership. In the same regard, it also implies that the relationship or the services offered by the consultant have changed or that they have already completed the services they had been contracted to offer.
How to Write a Termination of Consulting Agreement Letter
When you are looking to terminate a consultant, it is important that you do so by crafting a great termination letter- one that will not only inform the consultant that their services are no longer required but also help you or your company avoid any litigations for unfair dismissal.
Here are the key elements that you want to make sure you have covered in your letter:
Name, description and residence of the party
Start by including all the parties involved in the contract and mention the intended contract termination date as included in the contract agreement. Note that the names you include in the termination agreement letter should match the ones listed in the initial contract agreement.
The date of notice by the other party
Include the date of writing the letter and mention the exact date when their contract would no longer be considered valid. It is recommended that you give them at least two weeks’ notice to ensure that they set everything in order before leaving the office. This will also afford them enough time to complete any pending or ongoing tasks.
Clause of the notice in the consultancy agreement
It is recommended that when writing a consultancy agreement, you include a termination clause, i.e., the circumstances that warrant a termination of the contract. Consequently, when terminating the consultant, make sure to quote the termination clause as included in the initial agreement to help the consultant understand that your actions are in line with what you had agreed on.
The reason for termination
This is one part that you have to be keen on, especially when terminating an employee or a consultant. Ensure that the reason for terminating them is described in detail. Not every employee takes lightly being terminated; some may decide to take the legal route if they believe that the reason for their termination was unfair. To be safe, ensure that your reasons for termination are in line with your company policy as well as the initial agreement that you had signed.
Other points that you may want to include in the termination of consultancy letter agreement include:
Details of correspondences relating to any prior breach of contract
If the consultant had previously breached the contract and you had sent them several letters informing them of the breach, it is important that you mention such letters or correspondences in the termination letter.
Signature of the lawyer
When terminating a consultant, it is important that you seek legal counsel or have your lawyer do so on your behalf. Make sure that you provide a section for them to sign at the bottom of the page.
The relief sought
If there is any amount that is to be paid to the consultant or if they have to pay you for any reason, make sure to mention it in the letter. Also, mention anything else that the consultant has to return to the company or any benefits that they stand to get after the termination is complete.
Reasonable time to respond
Provide the consultant with enough time to act or reply to your letter. It is advised that you provide them with a two-week’ notice in the letter, after which you may contact them if they haven’t replied or acted on your demand.
NOTE: After drafting the letter, make sure to keep a copy. Also, make sure to provide your lawyer with a copy of the same to use in case of any litigations.
Termination of Consulting Agreement Letter Template
[City, State, Zip Code]
Date of writing the letter]
[City, State, Zip Code]
Dear _ [Recipient’s name],
This letter is to officially inform you that the consulting agreement between our company __ [name of company] and your consulting firm __ [name of consulting firm] entered on _ [date], will be terminated on _ [date of termination]. According to the set guidelines in the initial agreement which states that, “If either party in the agreement has any evidence that the other party has not fulfilled the expectations of the agreement, the first party holds the right to terminate the agreement before the completion of services.”
According to the contact, the consultancy agreed to offer good services to our company _ [company name], but we have only received your services on the basis of warnings and reminders. In this regard, we lack in our work. Due to this, we have unanimously decided to terminate this contract. We believe that it would be best if we meet in person, to explain what happened.
If you have any questions, with regards to this letter, you can contact our company at ___ [phone number] or email us on _____ [email address]. You are free to contact us anytime as it is your right to understand what happened. Please find and sign the enclosed copy of this termination letter and mail it to us as soon as possible. We wish you all the best in all your future endeavors.
_ [name of sender]
Attorney’s Name and Signature
Terminating someone is not always easy. When doing so, it is important to consider the mental and legal implications of the letter. To make sure that you terminate a consultant in the right manner, courtesy demands that you draft a termination letter informing the consultant why they are being terminated and when the termination would be effective. This is why we are giving you free easy to use consulting agreement termination letter templates that you can use to help you get the right words, format, and tone when writing.
When terminating a consultant, despite them not being your permanent employees, they may still decide to file a complaint with the Equal Employment Opportunity Commission when they feel that they have been terminated unfairly. This means that, when terminating them, you should tread carefully, even if the reason for doing so, in your eyes if obvious incompetence, end of the contract, change in contract demands, or persistently obnoxious behavior. In this regard, it is vital that you draft a great termination letter, one that will clearly explain your reason for terminating them and also lays out the dates and termination clause as included in the original agreement.