Termination of your employment may have been the. Also see if the time is counted from the date of the. Contract expires at the end of the term, unless the. But a contract - to be valid - need only provide enough information to outline the agreement and contain the signatures of both parties. There's no legal requirement that a contract contain a date, but if a contract is time sensitive and contains no date, it will be unenforceable.
Updated May 17, 2019
laptop image by Angie Lingnau from Fotolia.com
Updated May 17, 2019
All contracts come to an end at some point, often on a specific date or after a specified period of time. When you are a consultant, your contract with a client should include the date the contract expires as well as terms for extending the contract. Even when the expiration date is spelled out in the contract, it’s good practice to send your client a reminder letter for the end of the contract so the client doesn't forget that it is expiring.
Contract Renewal Reminder Letter
You want to send your contract renewal reminder letter a set period of time before your consulting contract ends. This may be a few weeks or a few months before the consulting contract expires to give your client enough notice to either renew the contract with you or find a new vendor. You should explain the purpose for the reminder letter in the first paragraph of your contract renewal letter to a client. Remind the client that the consulting contract is about to expire, including the specific date.
This letter serves as a reminder that your contract with XYZ Consulting Company is expiring on July 15, 2019, as indicated in our original contract.
Provide an Option to Renew
If you wish to continue providing services to the client, provide an option to renew in the next paragraph of your reminder letter. Say something positive about your consulting services, such as the results you have secured for the client so far. You might also offer a discount or other incentive in your contract renewal letter to persuade the client to renew the contract.
I have very much enjoyed working with your company the past two years and have been thrilled with the 45 percent growth we’ve been able to help you achieve. I’m eager to renew our consulting contract to see how much more growth we can achieve. If you’d like to renew our agreement, please contact me before the expiration date so there is no lapse in service.
It’s been our pleasure to work with you the past several months. If you’d like to continue receiving our services, we’d like to offer you a 20 percent discount if you renew before the contract expiration date.
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Choosing Not to Renew
There may be instances when you don’t want a client to renew the contract with you. Perhaps he was very difficult to work with or didn’t live up to his end of the contract. In that case, you don’t have to provide an option to renew and can simply state that the contract has expired with no option to renew. You can, of course, choose to explain why you don’t want to renew your consulting contract with as little or as much detail as you wish.
At this time, we are choosing to not renew our contract with you given how much difficulty we had getting deadlines met. We appreciate the opportunity we had to work with you and wish you the best on future endeavors.
Include Contact Information
In the last paragraph of your reminder letter for the end of the contract, let the client know how to get in touch with you if there are any questions or if she would like to extend the contract. Include your phone number and email address in your contract renewal letter. Add that you would like the client to contact you regardless of any contract renewals to discuss closing matters. This will give you another chance to persuade her to renew the contract if you’d like.
Always Be Professional
Whether or not you offer an option to renew, always be professional and polite in your contract renewal reminder letter. Be sure to thank the client for the past work. You never know when another opportunity will come up to work with that client, and you don’t want to leave a bad impression, especially if you’ve done a lot of good work together.
- laptop image by Angie Lingnau from Fotolia.com
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The Contractual Remedies Act 1979 (the 'Act') provides rules governing the cancellation of contracts. Section 7 of the Act outlines situations in which a party may cancel a contract, including for breach, and section 8 goes on to provide that so far as the contract remains unperformed at the time of cancellation, no party shall be obliged or entitled to perform it further.
This is consistent with the common law position that terminating a contract only terminates the duties of the parties to perform unperformed contractual obligations. Accrued contractual obligations remain enforceable. In this sense the contract itself is not terminated – rather it is the unperformed obligations of the parties which come to an end.
So which clauses survive a termination?
In some but not all contracts, the document makes this clear with an express 'survival' provision.
Because termination only brings unperformed obligations to an end, any obligations or rights which accrued prior to termination will remain. Thus in Brown v Langwoods Photo Stores Ltd the Court of Appeal affirmed that whenever a contract is cancelled under the Act, all rights based on prior breach or performance will survive.
Two accrued obligations that are most commonly recognised by the courts as surviving termination are:
- The obligation to pay money due under a contract; and
- The obligation to pay compensation/damages.
Other clauses commonly recognised as surviving termination of a contract include limitation of liability clauses, arbitration clauses and (potentially) indemnity clauses.
Limitation of liability clauses and arbitration clauses are recognised as continuing contractual obligations after termination, as affirmed by the House of Lords in Photo Production Ltd v Securicor. In this case Lord Diplock noted that cancellation will only terminate the primary contractual obligations (the parties undertakings), but not secondary obligations (clauses that are conditional on one of the parties breaching their undertakings). This is because secondary obligations arise at the time the contract is entered into and so continue unaffected after termination.
What about indemnity clauses within contracts?
Whether an indemnity clause within a contract would be treated as a primary or secondary obligation is more uncertain. An analysis of Photo Productions suggests that secondary clauses are only those that are triggered as a result of the breach of contract. Accordingly indemnity clauses would not be considered secondary obligations since their operation is not reliant on a party defaulting under the contract itself.
An indemnity contract (or clause in this context) usually gives rise to a primary liability on one party to pay the other party for loss suffered after the occurrence of a certain event. Therefore if the relevant event occurs before the contract is terminated, the indemnity clause is usually considered an enduring provision and one party is still obligated to indemnify the other even after termination of the contract. If the event occurs after the breach and termination of the contract then the indemnity clause is not enduring and any rights one party had to be indemnified for a loss would normally cease to exist along with the other primary obligations in the contract.
The importance of the parties intentions
The extent of discharge of provisions is of course always dependent on the intention of the parties to the contract. The importance of the parties' intentions is reflected by the fact that substantive clauses (such as restraint of trade and confidentiality clauses) are often drafted in a manner that clarifies that they survive a termination of a contract.
Therefore, if a contract contains an express provision that excludes all indemnity rights upon breach and subsequent termination of the contract, the expressed intention of the parties will govern and the indemnity will be excluded. However, if no such provision was contained in the contract, based on the reasoning above an indemnity should generally remain enforceable after termination, for any events prior to the termination date.
Does the defaulting party have any rights after termination?
The fact that a party to a contract has committed a breach does not deprive them of all rights arising from the contract.
Accordingly if the defaulting party possesses an accrued right to receive performance from the other party, this is not divested upon termination. A defaulting party may also claim damages for any breach committed by the other party prior to termination of the contract.
A defaulting party can also recover sums paid, but the ability to recover monies paid will depend on the terms of the contract, and the nature of the sum paid. More particularly, whilst a deposit is not usually recoverable by a defaulting party, an instalment payment will be recoverable where it is treated as being paid conditionally, upon completion or performance of the contract.