Free Printable Agreement Cancellation Form (GENERIC)

This review list is provided to educate you about the document in question and to help you prepare it.

Prepare this letter and send it to your lawyer, along with the underlying contract. An agreement cancellation is rarely uncontested. Because litigation takes a long time, unless settled along the way, it is very costly to act in haste and repent later, as the adage goes. This letter is typically used as the first tactic to get out of a contract. You should consult with your lawyer, as well as a litigation lawyer if your lawyer suggests it, to determine the best course of action.

The right of a buyer to cancel an agreement is determined by the contract and the law in general. In most states, the Uniform Commercial Code (UCC) governs. Before sending this notice, make sure you have the legal right to cancel the contract. To get proper answers to this question, you should consult a lawyer. As one might expect, the answers are ambiguous in many cases. In those cases, you must consider both the business and legal implications of your decision; consulting with your attorney on this is usually a necessary component of reaching a satisfactory conclusion.

In summary, these letters are typically used as a tactical means of solving a business situation. In most cases, no solution is acceptable to both parties. You must try to find the least painful and most acceptable solution for all parties. “It was a perfect compromise; both parties were equally unhappy with the result,” as we frequently say on our Negotiations Handbook CD.

Agreement Cancellation

Agreement Cancellation
Dear ________________:
You are hereby officially notified and put on notice that our contract dated ___________, termed the __________________ Agreement is cancelled for cause as a result of your breaches, as described in the Agreement itself.
Among the breaches are the following:

You are further notified and put on notice as required by UCC regulations that any obligation to make further performance under the Agreement is terminated, and that the right to proceed against you because of your breach of the Agreement is not waived.
You are further notified that as a result of your breach of the Agreement, we have suffered damages in the amount of $ __________________, computed as follows:
We expect you will make good on these damages and will expect to receive them within the next 30 days. If this is not possible, please contact us to set up a payment schedule so we can avoid legal expenses on both sides.
Yours very truly,
_______________
Authorized Employee
Agreement Cancellation
Review List
This review list is provided to inform you about the document in question and assist you in its preparation.
1. Prepare this letter and send it, along with the underlying contract, to your lawyer. Rarely does an agreement cancellation go uncontested. Since litigation takes an extended period of time, unless settled along the way, it is very expensive to act in haste and repent at leisure, as the old cliché goes. This letter is generally used as the initial tactic to get out of an agreement. You need to consult your lawyer, and a litigation lawyer if suggested by your lawyer, about the best way to proceed.
2. A buyer’s right to cancel an agreement is determined by the contract itself and the law in general. The governing law in most states is the Uniform Commercial Code (UCC). Make sure that you are legally entitled to cancel the contract before sending this notice. You need to consult a lawyer to get proper answers to this question. In many cases, as one would expect, the answers are ambiguous. In those cases, you must weigh the business and legal ramifications of your decision; consulting with your attorney on this is usually a vital component of a satisfactory conclusion.
3. In summary, these kinds of letters tend to be tactical approaches to resolve a business situation. As a rule, no solution is satisfactory to both parties. You must try to seek out a solution that is the least painful and most acceptable to the parties. As we often say in our Negotiations Handbook CD, “It was a perfect compromise; both parties were equally unhappy with the result.”

Frequently Asked Questions

What is an agreement cancellation letter?

An agreement cancellation letter is a formal notification that a contract is being cancelled for cause due to breaches described in the agreement. It puts the other party on notice that obligations to perform further are terminated and that the right to proceed against them for breach is not waived. The letter also typically states the damages suffered and requests payment.

When should I send an agreement cancellation letter?

You should send an agreement cancellation letter when you want to officially cancel a contract because the other party has breached it. The letter serves as formal notice and should be sent as soon as you decide to cancel for cause. It is important to send it promptly to protect your rights and avoid any waiver of claims.

What should be included in an agreement cancellation letter?

The letter should include the date of the original contract, the name of the agreement, a statement that it is cancelled for cause due to breaches, and a description of the breaches. It must also notify the other party that obligations to perform are terminated and that the right to proceed for breach is not waived. Additionally, it should state the amount of damages suffered and how they were computed, and request payment within 30 days or a payment schedule.

What does 'cancelled for cause' mean in a contract?

Cancelled for cause means the contract is being terminated because the other party has breached the agreement. The cancellation is not arbitrary but is based on specific breaches described in the agreement itself. This type of cancellation allows the non-breaching party to seek damages and terminate further obligations.

What are UCC regulations regarding contract cancellation?

Under UCC regulations, when a contract is cancelled for cause, the non-breaching party must notify the other party that any obligation to make further performance is terminated. The notice also preserves the right to proceed against the breaching party for damages. The letter serves as this required notification.

How do I compute damages in an agreement cancellation letter?

The letter should state the amount of damages suffered as a result of the breach and show how that amount was computed. The computation should be clearly explained, often with a breakdown of costs or losses. This provides transparency and supports any future legal claim.

What is the deadline for payment after sending an agreement cancellation letter?

The letter typically expects payment of damages within 30 days. If payment is not possible, the letter invites the other party to contact to set up a payment schedule. This aims to avoid legal expenses for both sides.

Can I cancel a contract without cause?

This letter is specifically for cancellation for cause due to breaches. It does not address cancellation without cause, which may be governed by other terms in the agreement or applicable law. The document focuses on breaches and the resulting termination and damages.

What happens if the other party does not pay damages after cancellation?

If the other party does not pay damages within the specified time, the letter suggests they contact to set up a payment schedule to avoid legal expenses. If they fail to respond or pay, the non-breaching party may proceed with legal action to recover damages. The letter preserves the right to proceed against them for breach.

Is an agreement cancellation letter legally binding?

An agreement cancellation letter serves as formal notice of cancellation for cause and preserves legal rights. It is not a court order but can be used as evidence in legal proceedings. Its effectiveness depends on the accuracy of the breaches cited and compliance with applicable law.