A Formal termination letter usually refers to a dismissal letter to an employee due to the poor work performance. However, in the business environment this letter refers to the termination of contract.

Therefore, the letter should provide precise reason(s) for the action taken. The letter is usually written in polite and apologetic tone. However if the letter is intended to criticize someone’s poor performance, than different tone and wording is in use. This is especially visible in the formal termination letters written to the vendor, who has failed to deliver service (s) or good (s) in envisaged manner. When the letter is written to the employee who has demonstrated poor work performance, polite tone should be used, rather that rude criticism.

In the text below we are providing you an example of the Formal Termination letter to the vendor

From:

[Name Surname]

[Position]

[Company]

[Address]

[MM/DD/YYYY]

To:

[Name Surname]

[Position] / If not familiar use [To whom it may be concerned]

[Company]

[Address]

[MM/DD/YYYY]

RE: Termination of Contract

Dear Mr. / Ms. [Last name],

With this letter, I am writing to inform you that [Company 1] will cease to take further supplies from [Company 2] from [Date]. According to our contract of collaboration No. [_______], signed on [Date of the signature], [Company 1] need only to give you a 15 days notice of termination which we are effecting with this letter.

[Company 2] failed to deliver desired quality of service and supplies, which is the main reason for the contract termination.

As you may see in the enclosure, we have informed your company twice during last three months that we are not satisfied with provided services. Despite this, your company has failed to improve overall quality of service.

We were highly dissatisfied with delayed deliveries and low quality of supplies, which has affected our production and quality of service we provide to our customers.  Since this can endanger our renown among customers and wider public, we have decided to discontinue cooperation with you.

We will settle all outstanding collections at the end of [Month, Year].

Thank you.

Respectfully yours,

[Signature]

[Name Surname]

[Position]

[Company]

CC:                         Procurement department

Finance Department

Enclosures:         Letter of complaint Nr. [], from [MM/DD/YYYY]

Re: Letter of complaint Nr. [], from [MM/DD/YYYY]