How to end a contract with a client

How to end a contract with a client image

There are many reasons you might want to end your client contract — maybe you’re taking your business in a different direction, they’ve breached the contract, or perhaps you just don’t want to work with them anymore.

Signing a contract doesn’t mean you’re bound for life in the working relationship, but how can you end the contract legally and minimise any repercussions on your business?

This blog explores some tips on how best to end your client contract. Remember, this information should only be used as a guide, so if you’re looking for professional contract or legal advice, consider approaching a solicitor.

3 things to consider before ending your client contract

Ending a contract can lift a weight off your shoulders, particularly if the client relationship is zapping a lot of your time and energy. But the process of ending it can be daunting if you’ve never done it before.

Here are some things to consider before you terminate the business contract.

Read through your termination clause

A termination clause is a section of your business contract that outlines what happens if either party wants to part ways. Some contracts might say giving a month’s notice via email would be sufficient to end the working relationship; others might detail a fixed period or stipulate other expectations before terminating.

Extra tip: It’s always a good idea to read through your contract in full before signing it anyway, but pay particular attention to the termination clause. Although the relationship might seem like a good fit initially, it can very quickly turn sour.

If you’re not happy with the termination clause in your contract, don’t be afraid to challenge the terms — after all, you’re a contractor, not an employee of their business, and the contract should be fair for both parties.

Is the contract almost at an end?

Let’s say you have a 12-month contract with a client, and you have one month left. Is it worth riding out the final month and saying goodbye peacefully in just four weeks? If the relationship is manageable for a short while, consider saving yourself the hassle and see out the remainder of the contract. After that, you can part ways amicably and you never have to hear from them again.

Can you fix the client relationship?

Business contract termination might not be the right decision for you and your business, particularly if the client in question is generating decent money for your business. There comes a time when you need to ask yourself whether the money is worth the effort, but if it is then maybe look at ways to improve the relationship.

If your client isn’t very good at communication or is non-responsive, consider creating a brief template so you can elicit all the answers you need from them at each project. Or if they don’t pay their invoice on time, introduce a late fee with your invoice.

Ending contract with client

4 things to consider when you’ve decided to end the contract

Complete outstanding deliverables

If you’re contracted to deliver a website, and the contract states you must finish the website in full, and the client has not breached the contract, you’re best to finish the project completely before terminating the relationship. If, however, you’re contracted by project milestones, you can complete the latest project milestone, give sufficient notice and leave the contract.

It doesn’t hurt to send a thank-you letter or email expressing gratitude for the opportunity to work with them and your hope to work with them again in some capacity in the future.

Follow the termination clause to the letter

This might sound obvious, but one missed detail can cause you unnecessary legal problems. If the termination clause demands a contract termination letter detailing the termination date, reason for termination and other information, send one and include everything the legally binding contract states.

If you follow the clause specifically, the client cannot dispute the termination of the contract.

Stay professional throughout the process

If you’re terminating the contract because the client is difficult to communicate with, try not to be petty, listing out everything they’ve done wrong throughout the relationship. Remember, you’re building a business, and people talk. It’s best not to burn your bridges and instead remain professional at all times, even if they don’t.

Refer another business in your place

A great way to make contract termination as pleasant as possible is to recommend another business that can take over from you. You’re helping the client transition from one relationship to another by offering a list of recommended contractors or freelancers.

When you say you’re no longer working with them, the client might panic about finding a replacement. By removing that worry, you’re keeping your relationship amicable and helping out the freelance community at the same time.

Extra tip: If this client is not a good company to work with i.e. they don’t pay on time, their communication is terrible and just dealing with them in general is a headache, don’t recommend them to other freelancers without disclosing all of this information first.

What to include in your contract termination email

If you’ve decided to terminate your client contract, what should you include in your termination email? If your contract outlines specifically what notice you should give and when, follow that instead. But if you just need to give your client notice via email, you could write something like this:

Subject line: Our working relationship going forward

To [name],

I hope you’re well. As of [date], I won’t be able to take on any more work from [their company], so please take this email as my notice to end our contract.

Of course, I will complete all outstanding projects before my last day [include a list of outstanding work].

If you’d like, I can recommend replacement contractors/freelancers to take my place so the transition is as seamless as possible.

I’ve really enjoyed working with you over the last few [months/years].

Thank you,

As your business grows and you work with more clients, it becomes easier to spot the classic red flag signs of a bad client. But, undoubtedly, you’ll still come across them and curse yourself forever stepping foot in the relationship. Knowing how to end your contract peacefully and legally is very helpful if you do find yourself in this situation.

52% of UK business owners worry about unpaid invoices. If you’re constantly chasing unpaid invoices, learn how to handle unpaid invoices here.

If you want to grow your business but need working capital and healthy cash flow to do it, see what loans you’re eligible to apply for by using our free business loan comparison tool. Get a quote today.

Disclaimer: This information is for guidance purposes only and should not be regarded as a substitute for taking legal advice. When making financial decisions, it is important to seek appropriate financial advice.

About the author

Helen Jackson Author
Written by Helen Jackson | June 03, 2024

Money Writer

Helen has over nine years of experience in content writing and writes financial content for us here at Capalona.

Updated: June 03, 2024
Published: June 03, 2024

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