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What Is the Difference Between Contract Termination & Cancellation?

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A contract termination calls off of an existing contract between two parties, for example an agreement between a landlord and tenant or a vendor and a producer. A contract cancellation usually involves canceling a service such as a magazine subscription or an insurance policy.

Termination vs. Cancellation Letter

The contract termination letter is proof that the contract has been terminated and that all parties involved have accepted the termination. A contract cancellation letter usually informs a service provider about a decision to cancel the contract and informs the company that its services will not be required in the future.

Letter Content

Termination letters should be in accordance with the original contract and should not have any loopholes that might lead to legal issues or controversies. It is important that the content of a cancellation letter clearly state that you wish to receive written confirmation that the letter was received.

Terms and Conditions

The termination letter must include the terms and conditions of the contract that caused the parties to terminate the contract. However a contract termination letter should include account numbers and references to prevent delays. It is also necessary to inform the company that it is no longer authorized to charge any payments to your automatic payment option on file.


Kaysha Sahai has been writing professionally since 2005. She is a self-published author with experience in features, business and technical writing. Sahai is also a passionate advocate for holistic wellness and holds a Bachelor of Science in business from the University of Central Florida.

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