How to Terminate a Contract of Employment

A contract of employment is a document signed by both an employer and an employee designating specific terms and conditions for the employment relationship. It differs from an offer letter in that it is not intended to be an at-will employment situation. A contract of employment falls within the rules of typical contract law. Each party is expected to perform according to the stated terms and conditions, including any clauses regarding termination of the contract.

Review the terms and conditions of the employment contract in detail. Highlight all sections that pertain to the length on the contract and termination clauses. Ask a legal or human resource professional if there is anything in the language not easily understandable.

Decide on a notice period. A notice period is the amount of time between tendering a notice of upcoming termination and the final work date. If the notice of termination is effective immediately then there is no notice period. The employment contract may specify a minimum number of days for a notice period.

Determine if a notice of termination contract will trigger any penalties under the employment . For example, failure to give proper notice per the contract terms may result in a monetary loss or require reimbursement of funds advanced in reliance on full contractual performance.

Draft a letter terminating the employment contract. While there is no required format, it is best practice to reference the employment contract by it's date of execution. Date the termination notice letter for formal notification purposes and state either a final work date or that termination is immediately effective. Note whether the termination is in compliance with the terms and conditions of the employment contract.

Sign the termination notice letter and arrange for it to be delivered by trackable means to the employer, such as certified mail. If the termination notice is sent only by electronic means, be sure to comply with appropriate electronic signature rules.


This article contains general information about legal topics but is not legal advice.

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About the Author

Joelle Ryssemus Sullivan is an employment lawyer and human resources specialist who writes about workplace issues. She is a graduate of the University of South Florida Law Schoo. Her work appears in newsprint publications such as the Marin Independent Journal and online at Demand Studios websites and

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