Drafting termination notices—contract breach

The following Dispute Resolution practice note provides comprehensive and up to date legal information covering:

  • Drafting termination notices—contract breach
  • Scope of this Practice Note
  • Using the precedent termination notices
  • Is there a right to terminate?
  • Multiple grounds for terminating
  • Is your termination notice is valid?
  • Should you terminate for breach?
  • Should you offer to settle your claim?
  • Termination and making 'without prejudice save as to costs' (Calderbank) and 'subject to contract' offers
  • Termination and Part 36 offer to settle?
  • More...

Drafting termination notices—contract breach

Scope of this Practice Note

This Practice Note on drafting a contract termination notice and an accompanying without prejudice offer letter to settle any claim arising out of the termination (where appropriate) identifies the key issues to consider and also sets out the context behind the drafting of each of our bespoke termination precedents. For guidance on using our related bespoke notice of breach precedents, see Practice Note: Drafting notices of breach.

When considering drafting a termination notice, it is essential to check that:

  1. there is a valid basis for terminating the agreement—see: Is there a right to terminate?

  2. where there are multiple grounds (or contractual clauses) for terminating that you select the most appropriate basis—see: Multiple grounds for terminating

  3. is termination the best option in all the circumstances?—see: Should you terminate for breach?

  4. you adhere to the contractual requirements for serving the notice—see: Is your termination notice is valid?

For general guidance on terminating contracts for breach, see Practice Notes:

  1. Termination for breach of contract

  2. How to terminate an agreement

Note: the right to terminate an agreement based on a party’s financial condition (so called ipso facto clauses) may be restricted by provisions proposals contained in the Corporate Insolvency and Governance Act 2020 (CIGA 2020). For further guidance, see Practice Note: Corporate Insolvency and Governance Act 2020—restrictions on ipso facto clauses.

As to force majeure

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