Sales Termination Letter

Introduction :

A sales termination letter is one that is addressed by a firm/trade company or anyone having a sales contract with someone else when they wish to terminate the sales order by them. An individual doing trade always wishes to have a written contract with his partners, in case of some situation where the transaction gets terminated due to some reason. So, when the termination of any sales takes place, it is necessary to inform the other person in writing.

A sales termination letter is a formal letter. It includes details as to why the sales was terminated. It should also include the details regarding compensation, if any, according to their trade contract. The tone of the letter should be apologetic if it’s only one party who is initiating the termination. However, if it mutual, then it should be done on the terms agreed upon.


Sample :


The following is the sample of Sales Termination Letter.



Shrikant Verma,

Sales Head,

RWO Pvt. Ltd.



Himanshu Shukla,

Purchase Head,

TER Pvt. Ltd.

Subject : Sales Termination letter

Dear Himanshu,

Warm greetings from my side. I hope you are doing well. I am writing you this letter to inform you that I wish to terminate our sales contract signed on 27th February, 2010. We had agreed on selling 5000 units of our product to you at a price of Rs. 500 per unit. However, due to the unstable market, we have decided to terminate this sales contract.

In the recent past, the market has been highly unstable. The prices of all products are skyrocketing and after doing a research we found out that the deal we made with you is indeed not good for our business. We manufactured our products a price little less than what we decided to sell to you. The sales was to take place a week from today, so we decided to inform you well in advance regarding the termination.

Since you had paid us an advance, as per contract, we shall return 100% of the same. This termination is simply because we have got a good market for our products and they are providing higher prices than you. However, if in case, you wish to change your decision for the pricing of the product, you can inform that to us and we shall make the deal once again. I am attaching the documents required for smooth cancellation process. If you have any queries, don’t hesitate to contact us.


Yours Sincerely,

Shrikant Verma,

Sales Head,

RWO Pvt. Ltd.

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