Terminating an agreement correctly. It may sound like a formality, but in practice, it is much more than just sending a note. It’s about knowing your rights and the terms within which you are acting. Proper termination can save you a lot of hassle, unexpected costs, and legal headaches.
The basis for a successful notice
Before you even start typing an e-mail, the first and most important step is to dive into your current agreement. No contract is the same, and how you can terminate it depends entirely on the agreements made at the time. So you really need to dig through the “small print”.
Those terms, often tucked away in the general terms and conditions, are basically your roadmap. They contain the specific rules set out by the other party for ending the contract. Pay particular attention to clauses on notice periods and the required form of termination. Does it have to be in writing, by registered mail, or will an e-mail suffice?
Fixed-term or open-ended contract
A crucial difference lies in the type of contract you have. This largely determines your flexibility.
- Open-ended contract: This is an ongoing contract with no end date, like your phone subscription or an employment contract. You can usually terminate these, as long as you stick to the agreed notice period.
- Fixed-term contract: This contract has a clear start and end date. Think of a one-year subscription to the gym or a six-month project contract. In principle, you are stuck with this until the end date, unless the agreement explicitly includes an option to terminate early.
A practical example: you have an annual contract with a streaming service. After seven months, you want to get rid of it. If the contract does not contain an early termination clause, you are contractually obliged to keep paying until the end of the year.
Termination, dissolution or mutual agreement?
The terms may seem similar, but legally there are big differences in meaning and consequences. It is essential to choose the right path for your specific situation.
A common mistake is wanting to ‘terminate’ a contract because the other party fails to honour its agreements. In such a scenario, ‘terminate’ is often the correct legal step, which entails very different rights and obligations.
Let us briefly list the three main methods:
- Termination: This is a unilateral action to stop an ongoing agreement. You don’t have to give a reason, as long as you stick to the notice period. Simple and effective for ongoing contracts.
- Rescission: You do this when the other party fails to fulfil its obligations, also known as breach of contract. A classic example is a supplier not delivering the goods ordered. Dissolution can often be retroactive, which means undoing work already done.
- Termination by mutual consent: Here, both parties agree to terminate the contract. This is often the most pragmatic solution, especially for fixed-term contracts that you want to end earlier anyway. Suppose you have a freelance assignment for a year, but the project turns out to be finished after eight months. Together, you can decide to stop the agreement. Make sure you always put this in writing in a so-called termination agreement to avoid misunderstandings.
Determine the right notice period and form requirements
One of the most common mistakes made when terminating an agreement? Missing the notice period. It is a classic pitfall that often leads to an unwanted and costly silent extension. So determining the correct term is crucial for a successful termination.
The first place to look is always your contract and its general terms and conditions. These will almost certainly contain a specific clause on the notice period and how to terminate. Don’t find anything here? Then you may fall back on legal rules or a collective agreement.
Where to find the notice period?
Your search for the right term starts at the source. Depending on the type of contract, you need to look in several places.
- The contract itself: Most agreements, such as a rental contract or a business service contract, contain a specific article on duration and termination.
- General terms and conditions: Sometimes they refer to the “small print”. Make sure you read these carefully, as they often contain details about the termination procedure.
- The collective agreement (Collective bargaining agreement): Especially for employment contracts, a collective agreement may prescribe a different, often longer, notice period than the legal standard.
- The law: If nothing is contractually stipulated, the statutory notice period applies. For an employment contract, this usually ranges from one to four months. You can find more information on terminating an employment contract on the central government website.
To give you an idea of the usual terms, we have made an overview. Please note that these are standards; your own contract is always leading.
Standard notice periods per type of agreement
An overview of common statutory and contractual notice periods for different types of agreements in the Netherlands.
| Type of agreement | Usual notice period (employee/consumer) | Usual notice period (employer/supplier) | Where to check |
| Employment contract | 1 month (legal) | 1 to 4 months (depending on length of service) | Contract, collective agreement, Civil Code (Book 7) |
| Rental contract (housing) | 1 payment period (usually 1 month) | 3 to 6 months (with legal grounds) | Rental contract, Civil Code (Book 7) |
| Business service contract (B2B) | Contractually defined | Contractually defined | Agreement, general terms and conditions |
| Consumer subscription | 1 month (after first contract period) | 1 month (after first contract period) | General terms and conditions, Dam Act |
| Insurance | Usually 1 month | Usually 1 month | Policy conditions |
This table serves as a guideline. Always check the specific documents that apply to your situation to be sure of the correct term.
The form of your notice
In addition to the deadline, there are also form requirements. Should you give notice by post or is an e-mail sufficient? While an e-mail is often permitted, it does not always provide the certainty you need.
Consider this practical example: you cancel your gym subscription via a simple e-mail, but the gym claims never to have received it. Without a reading or receipt, you are legally weak. Direct debits continue and the burden of proof is on you.
Tip from practice: Always choose a method that gives you proof of sending as well as receipt. A registered letter is the surest option because the recipient’s signature serves as irrefutable proof.
A digital registered e-mail is a modern alternative that also offers legal evidential value. Whatever you choose, explicitly ask for written confirmation of receipt and the final end date of the contract in your notice of termination.
This simple request can prevent a lot of discussion afterwards. Don’t get a response within a week or two? Then send a reminder. This will help you build a strong file and show that you are acting proactively.
Drafting a watertight letter of termination
A clear and unambiguous termination letter is your best defence against misunderstandings and discussions afterwards. Whether you opt for an e-mail or a classic letter by post, the structure and content are all-important for its effectiveness. The goal is simple: leave no room for interpretation.
The basis of a strong notice starts with the addressing. Make sure you use the full and correct name of the other party. Also consider the correct department, such as ‘customer service’ or ‘accounts payable’, and the branch address. This small detail will prevent your letter from getting lost internally and wasting valuable time.
Essential elements in your notice
To make your notice legally conclusive and above all clear, you need to include a number of fixed elements. In practice, omitting any of these elements can lead to delays or, in the worst case, an invalid notice. So make sure you always include the following information:
- Your full details: Name, address, postcode and city.
- The recipient’s details: The correct name and address of the company or person.
- A clear subject line: For example, “Subject: Termination of agreement [contract name] with contract number [number]”. This helps the recipient immediately see what it is about.
- Relevant contract details: Never forget to mention your customer number, contract number or policy number. This will help the recipient find your file quickly.
- The explicit cancellation statement: Be direct and clear. Use a sentence like, “I hereby cancel my [type] subscription with contract number [number] per [date].”
- Reference to the notice period: state the date you are cancelling, taking into account the applicable notice period. For example: “…subject to the contractual notice period of one month.”
By adhering to this structure, the recipient will know exactly what your intention is and will have all the information they need to process the cancellation correctly.
Sample cancellation letter
Below is a practical example that you can immediately adapt for your own situation. This format works fine for both an email and a physical letter.
[Your First name Surname]
[Your Street and House Number]
[Your Postcode and City]
[Your E-mail address]
[Your Telephone Number]
[Company/Organisation Name]
Attn: Management / Customer Service Department
[Street and House Number Company]
[Postcode and City of Company]
Subject: Termination of agreement with contract number [Your contract or customer number].
[Place], [Date]
Dear Sir/Madam,
Through this letter I wish to terminate my agreement with contract number [Your contract or customer number]. I terminate in accordance with the applicable notice period, with effect from the next possible date.
I kindly request you to send me a written confirmation of this termination, stating the final end date of the agreement. I would like to receive this confirmation within 14 days.
I also request that you terminate any direct debit payments as of the contract end date and remove my personal data from your systems in accordance with the AVG legislation.
I trust to have informed you sufficiently.
Kind regards,
[Signature (in the case of a physical letter)]
[Your First Name Surname]
Always ask for confirmation
Perhaps the most important sentence in the above example is the request for a written confirmation. This is your proof. It shows that your notice was not only sent, but actually received and processed.
Without this confirmation, you are left in limbo. Still get no response after a week or two? Then be proactive. Contact yourself and send a reminder. This prevents nasty surprises later and ensures you have a conclusive file.
When to terminate a contract
Sometimes, simply terminating a contract is not the right route, especially if the other party does not fulfil the agreements. In such a situation, we do not speak of termination, but of dissolution. This is a powerful legal remedy you can use in case of breach of contract.
Default may sound onerous, but it means nothing more than that a party does not fulfil the agreements in the contract, on time or correctly. Before you can take that step, however, a crucial intermediate step is almost always required: the default notice.
The role of the formal notice
A formal notice of default is basically a formal, written warning. You give the defaulting party a final, reasonable deadline to still do what was agreed. Only when that deadline has passed and nothing has happened, the other party is officially “in default”. From then on, you have the right to dissolve the agreement.
Suppose you hired a web designer. The deadline for your new website was 1 April. It is now 15 April, the site is not finished and the designer barely responds to your emails. What now?
- Wrong approach: Send an angry e-mail saying “I am dissolving our agreement”. Legally, this is way too short-handed and could get you into trouble later.
- Correct approach: Send a registered letter. In it, you give the designer a final deadline of, say, 14 days to deliver the website working. You clearly state that you will cancel the agreement if the deadline is missed again.
It is a persistent misunderstanding that you always have to go to court for dissolution. Fortunately, this is not true. The law allows you to dissolve a contract out of court – i.e. without a court – via a written statement. A (registered) letter or e-mail is sufficient for this.
What are the consequences of dissolution?
When you dissolve a contract validly, there are serious consequences. The main objective is to bring both parties back to the pre-contract situation. This is called the undoing obligation.
Specifically, in our example, this means:
- The web designer no longer has to finish and deliver the website.
- You no longer have to pay the agreed price.
- Have you already made a down payment? Then the designer has to refund it in full.
Besides this undoing, you may also be entitled to damages. For example, if you demonstrably lost sales because your website was not online on time, you can try to recover these damages from the web designer. Regulations, as published in the Government Gazette, confirm that, in the event of a default, parties may dissolve the agreement in writing, provided the default is serious enough and the debtor is in default. You can read more about these specific legal provisions directly. It is essential to understand this process – from default to dissolution – to get your justice if a partnership goes the wrong way.
Pitfalls in business and government contracts
Terminating a business agreement or a contract with the government differs from canceling your gym subscription. Here, you are dealing with specific industry conditions or legal frameworks that, if not carefully navigated, can have significant financial and legal consequences. A too quick or thoughtless approach can cost you dearly as an entrepreneur.
These contracts are rarely a standard A4 sheet. They are often full of complex clauses on intellectual property, confidentiality, and liability that continue beyond the expiry date. A common mistake is thinking that paying the last invoice eliminates all obligations.
Financial obligations after termination
Unlike a simple consumer contract, cancelling a business agreement can create an obligation to compensate for more than just the work already delivered. Especially with long-term contracts, you must consider that the supplier has already incurred costs in anticipation of the future.
Imagine: you have hired a software developer who has purchased specific, expensive licences for your project. Or a marketing agency that has already made media purchases for campaigns in the coming months. If you then terminate the contract, you will likely be required to reimburse these already incurred costs, even if you don’t yet have the final product in your possession. This principle is there to protect the service provider’s investments.
A crucial point when cancelling is that the financial bottom line is often beyond the contractual end date. Be prepared for a settlement of costs already incurred and obligations assumed by the supplier, relying on the continuation of the cooperation.
Government contracts and tenders
Doing business with the government? Then very different rules of the game apply. Many contracts for services are governed by the General Government Conditions for the Provision of Contracts for the Provision of Services, better known as the ARVODI. These conditions regulate the termination process in great detail.
When terminating a service contract under the ARVODI-2025, for example, the client must pay reasonable compensation for work already done as well as for future obligations. With European tenders, things get even more complex. Certain grounds for exclusion in the Procurement Act 2012 can even be grounds for immediate termination or dissolution of the contract. You can find more about these obligations and rules on PIANOo.nl.
Moreover, certain behaviors, such as a conviction for fraud, can constitute grounds for exclusion. This gives the government the right to stop an ongoing contract immediately and even exclude you for future contracts. So always make sure you are fully aware of the specific terms of your government contract. Only then can you truly minimise financial risks.
Frequently asked questions about cancelling an agreement
Terminating an agreement is simple in theory, but in practice, numerous questions often arise. What if you miss a deadline? Is an app enough? Below, I address some of the most common issues I encounter in my practice.
What happens if I miss the notice period?
It may sound like a small detail, but missing the notice period can have unpleasant consequences. In most cases, it leads to a tacit extension of your contract. This simply means that your contract will continue, often for the same period as the original one (e.g. another year).
You are then obliged to pay for the service, whether it is a subscription or rental contract, until you can cancel it again. This can lead to unexpected and sometimes significant costs that you could have easily avoided. So be keen on those dates.
Is a verbal termination ever valid?
Legally, a verbal agreement can be binding; however, the primary issue is proving it. In practice, it is almost impossible to prove that you gave verbal notice. If the other party denies it, you are empty-handed and legally extremely weak.
Therefore, always have a written method that provides a clear record of proof. Think proof of sending and, even better, receipt. That way, you avoid endless discussions afterwards.
What works best in practice?
- A registered letter with acknowledgement of receipt is the classic, watertight method.
- An e-mail in which you explicitly ask for a reading and receipt confirmation.
- A digital registered e-mail service can also help.
Can I terminate a fixed-term contract earlier?
A fixed-term contract, such as an annual subscription, is generally concluded for the full term. Cancelling the contract mid-term is therefore usually not possible.
The only exception is if there is a specific clause in the contract that explicitly allows this. Without such an ‘escape clause’, you are dependent on the goodwill of the other party. If they do not agree to terminate by mutual consent, you are stuck with the payment obligation until the agreed end date.
My notice is being ignored, now what?
Are you not getting a response? Then don’t wait too long. If, after a reasonable period, say a week or two, you have still not received a confirmation, it is time for action. Proactively send a reminder, clearly referencing your initial message and the date of the original send.
If you sent a regular e-mail the first time, it is now smart to deploy heavier artillery. Send the notice again, but by registered mail. This provides a legally binding receipt, which is invaluable if the situation escalates and you need to prove that you acted promptly.