Sometimes consulting agreements don’t work out the way the company envisioned. It might not have worked out because of poor performance, financial reasons, or another factor. In any event, terminating a consulting contract can get messy if done in the wrong manner and should be handled with professional politeness.

Here are some instances when a consulting agreement might not have worked and how to go about terminating it:

Contract Ended

If the contract is specified to end or contains a clause allowing either party to terminate with a certain amount of notice, the termination should go smoothly. Before terminating, look back to the terms of the agreement to make sure there is no violation. Then, put the cancellation in written terms and give it to the consultant. With it already being written into the agreement, it’s easier for the company to terminate or opt out of renewal.

Services Unneeded

If the company finds they no longer require the service the consultant is providing, they should provide an explanation along with the termination. Often this is because the company doesn’t have enough work to keep the consultant busy or they believe it would be more beneficial to hire someone in-house to handle the job.

Poor Performance

This can be a touchy subject when terminating the contract. The subject should be brought up if it would be beneficial to the consultant. It should be stated in a professional manner, and not brought down to a personal level. If the company feels it wouldn’t benefit the consultant, or could cause issues, they should feel free to give a generic reason for the parting of ways.

Financial Concerns

Sometimes a business discovers they can’t keep the consultant around because of budgetary reasons. In this situation, the company should be upfront about the reason. Let the consultant know their work has been appreciated, but they cannot continue the working relationship due to finances.

Well-written consulting agreements will have included terms on how to terminate and when it is acceptable. If a contract is lacking such terms, it could spell disaster for one or both parties. Most often, it is the consultant who files a lawsuit against the company who hired them for breaching the contract.

To avoid this possibility, have a corporate business attorney, such as an InnovaCounsel attorney write or review a consulting contract. With decades of experience, InnovaCounsel attorneys know exactly what should and shouldn’t go into a consulting agreement to protect everyone involved.