Business Termination Agreement

by Jennifer VanBaren ; Updated September 26, 2017

A business termination agreement is a letter written to end a business relationship. It contains information relating to two parties, their relationship, and the results and consequences of terminating the relationship.


A business termination agreement is a formal document that typically takes place between two businesses, or between an individual and a business.


This agreement is a formal way of terminating a business relationship. It is often done as a mutual agreement protecting both parties’ best interests and is considered a part of good business ethics. Business relationships are terminated for any of several reasons, including irreconcilable differences. Another reason is because a business chooses a new provider that offers better pricing or better services.

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The agreement specifies the parties involved in the termination, how and when it takes place, and the reasons. A detailed scope of severance pay, if applicable, is also included.

About the Author

Jennifer VanBaren started her professional online writing career in 2010. She taught college-level accounting, math and business classes for five years. Her writing highlights include publishing articles about music, business, gardening and home organization. She holds a Bachelor of Science in accounting and finance from St. Joseph's College in Rensselaer, Ind.

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