How To Write a Termination Notice (2 Ways to TERMINATE a Contract)

How to write a notice of termination of an employment contract. In any employment contract, there will be a section that deals with how to terminate the agreement. Parties can terminate an agreement in one of four ways. 

4 Ways Contract Termination Can Be Done

One, if it’s a fixed term, so if the contract only lasts for a period, let’s say it’s two years. If there’s no renewal language, the two years end and it’s not renewed. The contract is over with. You don’t need to notice a termination letter for that. The second way of doing it is through mutual agreement. Both parties, for whatever reason, decide it’s fine. They both want to move on. They can do it at any point without any notice to the other party.

Another way is through breach of contract. And in that scenario, suppose one party feels the other party is in breach of the contract. There will be language stating they have to provide written notice of what the wrongdoing and the breach were. And then usually, there would be a cure period. That means a period for the party breaching the agreement to fix it. Normally, that would be somewhere between 15 to 30 days. If they fix whatever the issue is during that period, then the other party can’t terminate it immediately. 

The last way is where the provider will write the notice of termination letter if it’s without-cause. In almost any contract, there’ll be without-cause termination. This means either party can terminate the agreement at any time with a certain amount of notice to the other. Normally, somewhere between 30 to 90 days, depending upon the industry. 

What’s in a Contract Termination Letter?

Now, in the notice of termination letter. I find most professionals want to put a lengthy treatise on their grievances with the employer. Plus all the reasons why they’re going to terminate the agreement and all the problems they’ve had. That’s a bad idea. All the professionals should put in the termination notice as per the agreement, “I’m terminating the contract via without-cause termination. I’m required to give you 60 days’ notice. My last day of work should be X date. I appreciate the opportunity. That’s it, sign it off.”

One thing to think about in the contract, it will state it should have something called notice or notices. It’ll state precisely how to provide notice in this scenario. So, if you’re required to provide written notice through a termination letter, that will state how you can give that notice to the employer. 

Other Blogs of Interest:

• How is Physician Productivity Calculated?
• Is a Letter of Intent for Employment Binding?

Termination Letter Do’s and Don’ts 

Often, email is not sufficient, certainly not verbally. Fax typically isn’t. Usually, people send via registered certified mail, overnight hand-delivered, or something like that. Then it will list specifically, here is the address you need to send it to. Say a provider or a professional doesn’t follow the notices section. The employer could state, you must stay with us until you give us effective notice. I’ve had a couple of times where a professional came to me and said, well, I just told my boss, so I assumed that was the start of the 30 days. And then they waited until 30 days. They said, hey, you never gave us effective notice, you owe us another 30 days. So, make sure you follow that.

There’s no benefit to airing the grievances. Nothing is going to change. If someone is leaving an organization, then just leave. You’re not there to fix whatever the issues are. And, likely, they’re not going to fix it anyway. If you’re at the point where you want to terminate the employment relationship, keep it short and sweet. I’m giving you notice per the agreement. This is how much notice I’m giving you, this will be my last day of work, appreciate the opportunity. That’s it. That’s all you need to do.

I know the inclination is, no, I want to put all the reasons why. But there’s honestly no benefit to you. Maybe you’ll create some bad blood. Who knows? Down the road, management changes. The job suddenly becomes a great opportunity, it could circle back around. You wouldn’t want to cause friction where it’s just unnecessary. There’s no need to justify your decision to terminate the agreement without-cause. It’s just simply not necessary. So, that’s how you will write a termination letter, short and sweet.

Can You Write an Email Letter to Terminate a Contract?

You probably shouldn’t, and your employment contract probably prohibits it. In any contract, it’s going to state how you can terminate an agreement. It could be for-cause, without-cause, mutual termination, or maybe the initial term ends. But in most cases, I mean most contracts are terminated without-cause termination. In without-cause termination, either party can terminate the contract with a certain amount of notice to the other. Typically, around 30 to 90 days is a standard amount for most employment agreements. Suppose you are an employee, and for whatever reason, you don’t want to work for the employer anymore. In that case, you need to follow those terms written on the without-cause termination notice.

And it always needs to be written. It’s going to state that you must write a letter. And then, it will also state if it’s a 60-day without-cause termination. The employee has to provide it 60 days prior, work it out, and after the 60 days are over with. The employees are free to go once the contract terminates, and the employees are free to move on. To where they want to go after that—considering if there’s a non-compete or a non-solicit. Still, we’re not going to get into that today. 

Check The Section of The Agreement Dealing With Notice Letter 

The most crucial part as far as this goes is it will be called notice or notices. It’s toward the back of the employment agreement initially provided by the company. And this will state who, then how you need to provide notice if there is communication.

An employee could provide in writing a certified letter overnight hand delivery of whatever termination notice you’re going to provide. And that would then be considered effective notice. Very few contracts allow email as an effective notice medium. Let’s say, you wrote an email telling your employer. “I’m giving you without-cause termination notice, and I have 60 days; X will be my last day of work. I appreciate the opportunity.” Well, if the email is not an effective communication medium within that notice section, that’s not considered effective notice. And then, the employer could make you work for another 60 days until you provide effective notice. So, that’s the most important part. You need to look in the notices section and determine if the proper way to terminate the agreement includes email. 

I can tell you if I review a hundred contracts, 98 of them will not include email or fax. And you certainly can’t just verbally tell your employer you’re leaving. It must be in writing. And most often, it has to be sent either by certified mail or hand-delivered. Depending on whether you work for a small practice or a big conglomerate with locations in every state. It’ll be impossible to hand-deliver the notice if you must provide notice to the headquarters that’s halfway across the country. 

Give a Printed Letter 

To be safe for the most part, you need to write a letter. You’ll have to print it out and send it via certified mail that the employer is using. Usually, it’s one or two. You must send it to the owner if it’s a smaller practice. If it’s a big conglomerate, you have to send it to your boss. Plus the legal apartment of the company as well. If you kind of look through, how much notice do I have to provide? And then how do I have to provide effective notice, you’ll be safe. 

I have a couple of scenarios, and people have called me after the fact. And they’ll say I sent a letter to my employer’s email. I told them I was going to terminate the contract, and they didn’t say anything. I assumed that my contract would end on a specific date. The employer was mad about the employee leaving the company. The employer was ticked off that they were leaving. So, what they did was they just sat on it for 45 days. Then, 15 days before the physician thought he was to leave, they said, you didn’t provide us with effective notice. Email isn’t an effective form of communication to provide notice. You owe us another 60 days until you give us effective notice, meaning a written letter sent via certified mail. 

However, the physician had already lined up another job, he had a start date in mind. Then he had to return to the new employer. He would say, I apologize; I will have to delay my start date by almost two months. That was a tough pill to swallow for the physician. If you follow the terms of the notice section, then you should be okay.

What Should Be in a Termination Agreement Letter?

What needs to go in a termination letter from an employee? If employees decide they no longer want to work for the employer, what to put in that letter? First, we have a few things to discuss regarding terms and termination. The term is the length of the contract, and it should be specified. It could be one year, two years, or three years. Then there’s normally a language that would say it would automatically renew for one year after that. More and more, there are evergreen contracts, which just means there’s no initial term specified. It just says the contract goes on forever until terminated by either party.

What Form Should a Contract Termination Letter Take?

After that, you need to identify how to terminate the contract. There are a couple of ways to terminate an employment contract. If it’s a fixed term, two years, no possibility of renewal, it ends, and that’s it. You don’t even need to send a letter. Then, mutual agreement. This isn’t working out if both parties approach the other. We don’t need to give notice. Let’s move forward. You don’t need a termination letter there. For cause means someone is in breach of contract. The contract will usually require written notice saying, hey, you’re breaching the contract. And then there’ll be what’s called a cure period. It means there’s a period for the employer to fix the breach or the employee. And if able to fix the breach within that period, it’s usually somewhere between 15 to 30 days. The contract reverts and the party couldn’t terminate for cause.

Contract Termination Letter When a Breach Has Occurred

If there was a breach of contract, let’s do this from the employee’s perspective. They would first send a written letter stating you are in breach of contract. And then, if there’s a cure requirement, you have 15 days to fix this breach. If it fails to fix the breach, the employee’s option is to terminate immediately. In that scenario, the employee would send another letter stating he failed to fix the breach. I’m terminating the contract immediately. Thank you. And that’s it. Once again, in the initial letter, you need to state the reasons for the breach of contract. And then, in the second letter, if they failed to fix the breach. Just state, hey, you didn’t fix this. I’m moving forward. 

You don’t need to put a list of grievances or all of the problems with the employer. You just say you breached; and you didn’t fix it. And give the details about the breach and then move on. Now, that’s rare. The most common way to terminate a contract is without-cause. Almost any employment contract has a statement saying. Suppose either party wants to terminate the agreement at any time. In that case, they can do so with a certain amount of notice to the other party. 30 to 90 days, anywhere between, is standard for without-cause termination notice. 

In that scenario, that’s where the termination letter would come into play. Let’s say the professional has a 60-day notice. They write the letter, they say per the agreement. I’m giving you 60 days’ notice. My last day of work will be X date. Thank you for the opportunity. I’m moving on. Once again, this letter is not the time for an airing of grievances or all the problems.

Keep Your Contract Termination Letter Short and Simple

Putting all of that down on paper is no benefit to the employee. It needs to be short and sweet. I’m exercising my right to terminate the agreement without-cause. I’m providing you with this amount of notice as required. My last date of work is this. Thank you for the opportunity. Good luck. That’s it. There are zero benefits to burning bridges to pointing out all the flaws in the employer. I know many employees feel like I just wanted to say my piece. It’s not a good idea for a couple of reasons. At that time, that job may stink because of management, mismanagement, the people you’re working with, the opportunity, whatever.

And if you send some nuclear bomb letter and destroy the relationship, what if something happens down the road? What if the manager changes? What if they move into new territory? Or what if someone buys them out? If you’ve nuked those relationships, that opportunity may be much better. Now, it’s a bad look, and you may have lost out on being able to go back. That’s one reason not to do it. And the second one is that there’s simply no benefit. If you’re moving on, move on. It feels good for the employee to get all that stuff out. But when it’s written, it’s forever. And so, they’re going to have that letter. They’ll probably show it to other employees or management if it’s bad. And it just makes the employee look bad. 

So, keep it short and sweet. Say, this is the contract section, I’m exercising this without-cause termination, last day of work is this. Thank you. Move on. That’s it.

Can an Employee Terminate a Contract at Any Time?

The short answer is probably. However, it’s going to depend upon the language in the contract. There are ways that an employee can terminate an agreement. One, if there’s a fixed term, meaning a one-year, two-year, or three-year contract. And there’s no language that states the employment contract automatically renews. At the end of that fixed term, if neither party wants to sign another arrangement, the contract terminates. Both parties can move on. That’s it. That’s one way on the agreement that can end a contract. Two, through mutual agreement. Maybe it’s not working out, and both parties are like, you know what? Let’s move on. You can mutually agree to terminate the agreement. Three, for the cause. In any employment contract, there will be a section called termination. In that section, it’s going to state how both parties can terminate the agreement.

Employee Contract Termination Without Cause

Without-cause termination is going to be. If one party breaches the contract somehow, how can the other party terminate the contract for the breach? In most of the for-cause termination clauses, it’s going to state if one party believes the other party is in breach, they must give them written notice. And then that party usually has a period to fix the breach. We called that a cure period. Usually, it would be somewhere between 15 to 30 days. Maybe the employee wasn’t getting paid a bonus that the employer said they would. The employee lets the employer know: you’re in breach of the employment contract. You have 15 days to pay me my bonus, or I can terminate the agreement immediately.

The employer can no longer terminate for-cause if the employer does pay the bonus. And then they could go to the last way of ending the contract without-cause.

Termination Notice Period

In every employment contract, this is very important. There should be a without-cause termination. It means either party can legally terminate the agreement at any point, for any reason, with a certain amount of notice to the other party. Usually, that notice period will be between 30 to 90 days. Why is this important? Suppose an employee takes a job and maybe they were lied to by the employer. In that case, if they’re on a production-based compensation from collections, commission, percentage, encounters, and healthcare RVUs, it doesn’t matter. But suppose an employee agreed to the contract and the employer gives no guaranteed base, daily rate, or guarantees. Turns out, the volume isn’t nearly what they expected it to be or what the employer said it would be. They don’t have a way to get out of a contract without-cause. 

The workers won’t have an exit in that job for whatever the length of the term is. That’s not something you want. You always want the ability to get out of the employment contract with a certain amount of notice in the scenario where the job isn’t what you expected. Maybe your boss is a terrible manager, or they’re placing you in a territory you don’t want to be assigned. I mean, hopefully, the employee could check on those in advance of signing the employment agreement. Sometimes, they’re not. Sometimes the employer just straight-up lies to the employee and says, yes, all these things are going to be there. And they’re not. Without the Without-cause, employees can insulate themselves from being stuck in a terrible situation for a long time without recourse.

Safety When You Need to Terminate an Employment Contract

So, can an employee terminate a contract at any time? If they have without-cause termination, remember that they must work the entire notice period. Like I said before, if it’s 30 days, give notice, work 30 days, and leave. Suppose you were to go before the end of the notice period. In that case, the employer could theoretically have damages and sue you for lost profits, recruiting, or replacement. So, if you have a notice requirement in your contract, ensure that you give the proper amount of notice. You work it out, and then move on and find a new job.