5 Ways to End a Contract on Good Terms


In business, sometimes things just don’t work out. That doesn’t mean that everyone has to walk away angry or that there needs to be a total severing of the business relationship. There are plenty of ways (and reasons) to end contracts on good terms so that you can keep those relationships, even if you’re no longer working together in a business capacity. Sometimes, the right ending depends on the situation and the terms at hand, so as you’re reading this guide, think about your business and which scenarios would work best for the options provided. 

Although there are many, as we said, we’re going to focus on five of the best ways to end contracts on good terms. After all, there are thousands of ways to end things on bad terms, but that’s not what you’re going for. Here’s what you need to know. 

1. Have a termination clause 

A termination clause is a specific clause that’s written into a contract that allows for termination in the event that the terms or criteria are not met. This allows parties to end a contract on amicable terms and the “no ambiguities termination” as it is sometimes called would not signal the end of the business relationship. Essentially, it’s an easy out that says, “Hey, we tried, but this just isn’t working. No hard feelings?” 

Make sure that all parties agree on the termination clause and its terms in advance of signing the contract to further reduce the risk of friction in relations if things just don’t work out. You can get help with this part of the contract when you take the next step: talking to an attorney

2. Consult an attorney for their input

In business, it’s always a good idea to have an attorney on hand that you can consult for situations just like this. If you aren’t sure how to go about ending the contract, or if you aren’t sure that you have the cause to end the contract, talk to a lawyer who understands contracts and the laws surrounding them in your state. They will be able to help you navigate the issues that you are having and figure out the best way out of the situation for everyone involved. 

An attorney will also be able to tell you if a contract cannot be ended for one reason or another without a breach, or if there are certain terms that need to be met to have the contract terminated even when the contract has not been entirely fulfilled. 

3. Submit notice in writing 

The most professional, polite way to notify someone that a contract is ending is to do so in writing. Be direct and narrow in your word choice. Don’t explain your reasoning away or give anyone the chance to use your words against you. Simply explain that you are terminating the contract because the terms were not met (or for whatever other reason you deem it necessary) and that any concerns can be returned to you in writing or via your preferred contact method. 

If you want to protect yourself and your business, you may even ask the other party (or parties) to contact your lawyer regarding the termination of the contract. They will help you execute the termination and ensure that all parties get the resolution that they deserve, regardless of the terms or the cause for termination. 

4. Be respectful at all times (and realistic)

In a perfect world, every contract would go off without a hitch and every single term would be fulfilled. All the obligations would be met, on all parts, and everyone would walk away happy. However, that’s not realistic, by any means. No matter how long you’ve been in the business world, you know that there are just times that some things don’t work out. You also need to know that there’s nothing wrong with that and it doesn’t mean that you have to sever ties or create conflict out of the contract ending. 

Be respectful and you will get respect in return. No one wants to stay on “good terms” with a company that treated them like dirt right up until the contract was failing and then suddenly pulled an about-face to try to make themselves look good. If you honor your commitments and respect your business partners, you will get much further. 

5. Consider negotiation instead

If you think that a contract needs to be terminated because the terms and conditions aren’t likely to be fulfilled, it might be better to negotiate first. This will give you the chance to shorten the length of the original contract to a term that’s agreeable to everyone. That ensures that there is no animosity and that the rest of the contract can be executed respectfully on both sides. 

This is another factor that you can discuss with your lawyer when you are going over the contract and trying to figure out how to proceed. Sometimes, you don’t really need to just cancel the contract—that’s a rash decision usually based on the assumption that it’s the only choice. However, renegotiation is absolutely an option and one that you should consider to keep things on good terms. 

While you’re dealing with contracts, who is handling other communications?

Running a business is a lot of work and you’re dealing with contracts, negotiations, vendor and client relationships—the list never ends. You should take the time to invest in a 24/7 answering service that can deliver the solutions that you need for integrated, full-service communications that include live website chat, appointment scheduling, and so much more. 

Our team can even assist with your outreach campaigns and outbound sales needs to get the leads coming in to begin with. Plus, it will come with a custom-tailored strategy to manage every detail just the way you want.

To learn more, schedule a consultation to discuss what the 24/7 virtual receptionists at Smith.ai can do for your business. You’ll also be able to find us at (650) 727-6484 or hello@smith.ai

Business Education
Written by Samir Sampat

Samir Sampat is a Marketing Manager with Smith.ai. He has experience working with businesses of all sizes focusing on marketing, communications, and business development.

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