Cancellation Letter to Vendor: Meaning, Tips and Format

When a company faces a tough situation, or a vendor consistently fails to meet its contractual duties, a cancellation letter to vendor is sent. .

This letter is written to terminate any contracts it has with the vendor. A cancellation letter from a vendor ceases any commitments or obligations under the agreement.

Sending a termination letter with a thank-you note can demonstrate professionalism to a vendor or supplier.

So how do you draft an acceptable cancellation letter to vendor? This article provides tips and formats of a good cancellation letter.

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Photo by Nick Hillier on Unsplash

What Exactly is a Vendor Contract?

A vendor contract is an agreement with a supplier which defines the terms of an ongoing business relationship. Most business types require a contract to exist to pursue any business transaction. But, this is especially relevant for suppliers who provide services or products.

Without a signed agreement between you and the supplier, you may be unable to change the services or products to suit your company. Including this kind of agreement with any invoices you send to your customers is a good practice.

Writing Tips: Cancellation Letter to Vendor

The ability to exit the agreement is crucial in any vendor contract. The best contracts will include provisions that allow either party to end the agreement in certain circumstances.

It’s easy to get out of a contract if you’re the vendor. You can end your contract with a client by sending them a letter explaining why you won’t be delivering the goods or services anymore.

Here are points to note when writing a cancellation letter to a vendor:

  • The letter must say precisely why the services are being cut off.
  • Even though this is a formal letter, it is essential to note that no harsh or insulting language is used.
  • In the letter, the dealer must say clearly when they plan to end the contract so that any financial obligations can be met.
  • The letter should end with good manners and gratitude.

Format for Cancellation Letter to Vendor

Supplier Name

123 Your Street

Your City, ST 12345

(123) 456-7890

Email Address

4th September 20XX


Dear (Name),

I write to you, following the terms of our business contract, to officially terminate our agreement as of today (DATE).

I am providing notice to fulfill my legal obligation to you by the contract terms. This is done to avoid any penalty fees and legal action.

I’d like to thank you for your business over the last few (STATE MONTHS OR YEARS). I would also like to state that this contract cancellation has nothing to do with you or your company. We recently sold out to a larger company and will be receiving our supplies from that company’s vendors.

(Insert firm name) will handle the situation going forward. We will schedule a transition meeting in the coming days. Please find your final invoice for services rendered; this should be completed and finalized by the end of the (MONTH, DAY, YEAR).

Congratulations on your continued success. If you have any questions or require any additional information regarding our contract cancellation of services, please contact me at (PHONE NUMBER) or


First, Last Name

Final Words

If you have not done so already, you should have an agreement in place to provide services or products to the company. Follow these tips and format to end your relationship with a vendor in the most professional manner possible.

Abir is a data analyst and researcher. Among her interests are artificial intelligence, machine learning, and natural language processing. As a humanitarian and educator, she actively supports women in tech and promotes diversity.

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