Business Etiquette & Terminating a Contract
Terminating a business contract is a natural part of business. This can occur due to rising costs, lack of performance or even a lack of funding from the business purchasing the service (or the employer needing to lay off an employee). Basic etiquette provides some rules for terminating a contract professionally.
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Effects
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The individual whose contract is terminated may experience surprise at the contract termination. The person terminating the contract should express empathy for the concerns of the other individual, but should remain professional at all times.
Method
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Email termination is considered impersonal and unprofessional. The termination of a contract is a major business decision and should therefore necessitate an in-person discussion. If a face-to-face meeting is unavailable, a phone call is acceptable.
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Considerations
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If possible, the person terminating the arrangement should provide some basic reasons for the termination, such as lack of performance, budget constraints or contract length. Regardless of the circumstances, both parties should endeavor to end on positive terms and thank the other for his time.
Expert Insight
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After an initial discussion, the contract termination must end in formal writing. Depending on the situation, an email may be acceptable, but a hard copy is generally expected. (For an example, please see Contract Termination Letter in references.)
Clarity
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Both parties should be clear about how and when the contract should end to avoid miscommunication and awkwardness. Each individual should follow every legal and company-specific guideline in addition to offering the other general respect.
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References
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- Photo Credit Image by Flickr.com, courtesy of hobvias sudoneighm
