Purchase Agreement Termination Letter Sample

A purchase agreement termination letter is a formal declaration written by a firm/company to another producer/company/firm to cancel the agreement signed between them. The most common reasons why most people cancel the agreements are:

  • Breach of contract by the other party; or
  • Failure of a condition/event to be approved as called for in a contingency provision
  • Misrepresentation by their agents

The act of canceling an agreement is considered unilateral since the cancellation is usually undertaken by only one party. The letter is meant to halt any remaining activities that were to be performed under the agreement. It also eliminates any future enforcement of the agreement from the moment of cancellation. The cancellation of an agreement does not, however, affect any legal consequences or liabilities for events that were undertaken before the cancellation.

On the other hand, rescission of either a complete real estate transaction or an unexecuted purchase agreement is a bilateral agreement in which both parties retroactively annul and terminate the agreement from the moment it was entered into.

Sample Termination Letter To Purchase Agreement

Subject: Termination of Purchase Agreement Dated January 15, 20XX

Dear Mr. Smith,

I am writing to you on behalf of Widget Solutions Inc. concerning the Purchase Agreement we entered into on January 15, 20XX. This agreement was for the supply of automotive parts essential for our production line, as detailed in the document referenced as Agreement #WS-QP-01/15/24.

After a thorough review and consideration, it is with regret that we have decided to terminate the aforementioned Purchase Agreement. This decision has been prompted by repeated delays in delivery, which have, in turn, significantly impacted our production schedules and commitments to our clients. As per the terms outlined in the agreement, specifically under Section 8, “Termination for Cause,” we are entitled to terminate the agreement due to non-compliance with the agreed-upon delivery schedules.

Please consider this letter as the formal 30-day notice of termination, effective immediately, with the termination becoming fully effective on April 3, 20XX. We expect that any outstanding financial obligations will be settled in accordance with the terms of the agreement, and we request a final statement of account to be provided by your earliest convenience.

We also request the return of any Widget Solutions Inc. property currently in your possession, as per the terms of our agreement. Details of the items to be returned and the process for their return will be communicated to you in a separate document.

We would like to express our appreciation for the efforts made by Quality Parts Co. to resolve these issues and regret that we find ourselves in a position where termination of the agreement is our only recourse. We hope that this termination will be handled with professionalism and that we can conclude our business amicably.

Should you require any further information or have any questions regarding this termination, please do not hesitate to contact me directly at 555-123-4567 or via email at jane.doe@widgetsolutions.com.

Thank you for your immediate attention to this matter.



Jane Doe

Procurement Manager

Widget Solutions Inc.


  1. Copy of the Original Purchase Agreement (Agreement #WS-QP-01/15/24)

About This Article

Justin W. Heeg
Authored by:
Contract Specialist, Business & Real Estate Attorney
Justin W. Heeg, Esq., founder of Heeg Law PLLC, brings extensive expertise in legal contract writing, with a special focus on real estate, complemented by a strong foundation in trusts and wills. Previously a prominent figure at Dwight Capital, a premier U.S. commercial real estate lender, Justin played a pivotal role in shaping their mortgage REIT strategy and overseeing legal compliance. His tenure at the esteemed law firm Skadden, Arps, Slate, Meagher & Flom LLP saw him facilitating significant real estate transactions, advising top-tier lenders, and equity firms. With his rich legal background, Justin stands as a trusted expert in both business and real estate law.

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