Guide to Judiciary Policy 

Vol 14: Procurement 

Ch 7: Contract Administration 

Appx 7D: Sample Contract Termination Notices 

Review and approval by the PE must be obtained prior to issuance of any of the 

following notices. See: Guide, Vol 14, § 755.10.40. 

§ 7A.100 No-cost settlement agreement – complete termination. 

[Insert the following in Block 14 of SF 30 when executing a no-cost settlement 

agreement, under a complete termination.] 

(a) This supplemental agreement [insert “modifies the contract to reflect a nocost settlement agreement with respect to the Notice of Termination dated ____” 

or, if the contract has not been terminated by prior notice, “terminates the 

contract in its entirety”]. 

(b) The parties agree as follows: 

The contractor unconditionally waives any charges against the judiciary because 

of the termination of the contract and, except as set forth below, releases it from 

all obligations under the contract or due to its termination. The judiciary agrees 

that all obligations under the contract are concluded, except as follows: [List 

reserved or excepted rights and liabilities.] 

(End of agreement) 

§ 7A.105 No-cost settlement agreement – partial termination. 

[Insert the following in Block 14 of SF 30 when executing a no-cost settlement 

agreement, under a partial termination.] 

(a)	 This supplemental agreement modifies the contract to reflect a no-cost 

settlement agreement with respect to [insert “the Notice of Termination 

dated ____________” or, if there has not been a prior termination notice 

issued, “the partial termination of the contract as outlined below”.] 

(b)	 The parties agree as follows: 

(1) The terminated portion of the contract is as follows: [Specify— 

Last revised June 29, 2010 
Guide to Judiciary Policy, Vol. 14, Appx. 7D	 Page 2 

(i)	 item numbers, 

(ii)	 descriptions, 

(iii)	 quantity terminated, 

(iv)	 unit and total price of terminated items, and 

(v)	 any other explanation necessary to avoid uncertainty or 

misunderstanding.] 

(2)	 The contractor unconditionally waives any charges against the 

judiciary arising under the terminated portion of the contract or by 

reason of its termination, including, without limitation, all obligations 

of the judiciary to make further payments or to carry out any further 

undertakings under the terminated portion of the contract. The 

judiciary acknowledges that the contractor has no obligation to 

perform further work or services or to make further deliveries under 

the terminated portion of the contract. Nothing in this paragraph 

affects any other covenants, terms, or conditions of the contract. 

Under the terminated portion of the contract, the following rights 

and liabilities of the parties are reserved: [List reserved or excepted 

rights and liabilities.] 

(End of agreement) 

§ 7A.110 Letter Notice of Termination for Convenience. 

The following letter is suggested for use if a contract for products is being terminated for 

convenience, and a no-cost settlement is not possible. With appropriate modifications, 

it may also be used in terminating contracts for services. This notice shall be sent by 

certified mail, return receipt requested. Alternatively, it may be hand-delivered to the 

contractor’s representative and a hand receipt obtained. 

Notice of Termination 

[At the top of the notice, set out all special details relating to the particular 

termination; e.g., name and address of company, contract number of terminated 

contract, items, etc.] 

(a) 	Effective date of termination. You are notified that Contract No. 

______________ (referred to as “the contract”) is terminated __________ 

[insert “completely” or “in part”] for the judiciary’s convenience under the 

clause entitled _____________ [insert title of appropriate termination 
Guide to Judiciary Policy, Vol. 14, Appx. 7D	 Page 3 

clause]. The termination is effective __________________ [insert either 

“immediately upon receipt of this Notice” or “on ____________, 20____,” 

or “as soon as you have delivered, including prior deliveries, the following 

items:” (list items to be delivered)]. Reduce items to be delivered as 

follows: [insert instructions]. 

(b)	 Cessation of work and notification to immediate subcontractors. You 

shall take the following steps: 

(1)	 Stop all work, make no further shipments, and place no further 

orders relating to the contract, except for— 

(i) The continued portion of the contract, if any; 

(ii)	 Work-in-process or other materials that you may wish to 

retain for your own account; or 

(iii)	 Work-in-process that the contracting officer authorizes you 

to continue (A) for safety precautions, (B) to clear or avoid 

damage to equipment, (C) to avoid immediate complete 

spoilage of work-in-process having a definite commercial 

value, or (D) to prevent any other undue loss to the judiciary. 

(If you believe this authorization is necessary or advisable, 

immediately notify the contracting officer by telephone or 

personal conference and obtain instructions.) 

(2)	 Keep adequate records of your compliance with paragraph (b)(1) of 

this section showing the— 

(i)	 Date you received the Notice of Termination; 

(ii)	 Effective date of the termination; and 

(iii)	 Extent of completion of performance on the effective date. 

(3)	 Furnish notice of termination to each immediate subcontractor and 

supplier that will be affected by this termination. In the notice— 

(i)	 Specify your judiciary contract number; 

(ii)	 State whether the contract has been terminated completely 

or partially; 
Guide to Judiciary Policy, Vol. 14, Appx. 7D	 Page 4 

(iii)	 Provide instructions to stop all work, make no further 

shipments, place no further orders, and terminate all 

subcontracts under the contract, subject to the exceptions in 

paragraph (b)(1) of this section; 

(iv)	 Provide instructions to submit any settlement proposal 

promptly; and 

(v)	 Request that similar notices and instructions be given to its 

immediate subcontractors. 

(4)	 Notify the contracting officer of all pending legal proceedings that 

are based on subcontracts or purchase orders under the contract, 

or in which a lien has been or may be placed against termination 

inventory to be reported to the judiciary. Also, promptly notify the 

contracting officer of any such proceedings that are filed after 

receipt of this Notice. 

(5)	 Take any other action required by the contracting officer or under 

the Termination clause in the contract. 

(c)	 Termination inventory. 

(1)	 As instructed by the contracting officer, transfer title and deliver to 

the judiciary all termination inventory of the following types or 

classes, including subcontractor termination inventory that you 

have the right to take: [Contracting officer insert proper 

identification or “None”]. 

(2)	 To settle your proposal, it will be necessary to establish that all 

prime and subcontractor termination inventory has been properly 

accounted for. 

(d)	 Settlements with subcontractors. You remain liable to your 

subcontractors and suppliers for proposals arising because of the 

termination of their subcontracts or orders. You are requested to settle 

these settlement proposals as promptly as possible. 

(e)	 Completed end items. 

(1)	 Notify the contracting officer of the number of items completed 

under the contract and still on hand and arrange for their delivery or 

other disposal. 
Guide to Judiciary Policy, Vol. 14, Appx. 7D	 Page 5 

(2)	 Invoice acceptable completed end items under the contract in the 

usual way and do not include them in the settlement proposal. 

(f)	 Patents. If required by the contract, promptly forward the following to the 

contracting officer: 

(1)	 Disclosure of all inventions, discoveries, and patent applications 

made in the performance of the contract. 

(2)	 Instruments of license or assignment on all inventions, discoveries, 

and patent applications made in the performance of the contract. 

(g)	 Employees affected. 

(1)	 If this termination, together with other outstanding terminations, will 

necessitate a significant reduction in your work force, you are urged 

to— 

(i)	 Promptly inform the local state employment service of your 

reduction-in-force schedule in numbers and occupations, so 

that the service can take timely action in assisting displaced 

workers; 

(ii)	 Give affected employees maximum practical advance notice 

of the employment reduction and inform them of the facilities 

and services available to them through the local state 

employment service offices; 

(iii)	 Advise affected employees to file applications with the state 

employment service to qualify for unemployment insurance, 

if necessary; 

(iv)	 Inform officials of local unions having agreements with you 

of the impending reduction-in-force; and 

(v)	 Inform the local Chamber of Commerce and other 

appropriate organizations which are prepared to offer 

practical assistance in finding employment for displaced 

workers of the impending reduction-in-force. 

(2)	 If practicable, urge subcontractors to take similar actions to those 

described in paragraph (1) of this section. 
__________________________________________________ 

__________________________________________________ 

__________________________________________________ 

__________________________________________________ 

__________________________________________________ 

Guide to Judiciary Policy, Vol. 14, Appx. 7D	 Page 6 

(h)	 Administrative. The contracting officer will, upon request, provide the 

necessary settlement forms. Matters not covered by this notice should be 

brought to the attention of the undersigned. 

(i)	 Please acknowledge receipt of this notice as provided below. 

(Contracting Officer) 

(Name of Office) 

(Address) 

Acknowledgment of Notice 

The undersigned acknowledges receipt of a signed copy of this notice on 

____________, 20____. Two signed copies of this notice are returned. 

(Name of Contractor) 

By _______________________________________________
 

(Name)
 

(Title) 

(End of notice) 

§ 7A.115 Letter Notice of Default Termination. 

The following letter is suggested for use if a contract for products is being terminated for 

default. With appropriate modifications, it may be used in terminating contracts for 

services. This notice shall be sent by certified mail, return receipt requested. 

Alternatively, it may be hand-delivered to the contractor’s representative and a hand 

receipt obtained. 

Notice of Termination 

[At the top of the notice, set out all special details relating to the particular 

termination; e.g., name and address of company, contract number of terminated 

contract, items, etc.] 
Guide to Judiciary Policy, Vol. 14, Appx. 7D	 Page 7 

(a) 	Effective date of termination. You are notified that Contract No. 

______________ (referred to as “the contract”) is terminated __________ 

[insert “completely” or “in part”] for default under the clause entitled 

_____________ [insert title of appropriate termination clause]. The 

termination is effective __________________ [insert either “immediately 

upon receipt of this Notice”] 

(b)	 This termination is based upon your failure to [describe the acts or 

omissions constituting the default, including the response, if any, to a cure 

notice or show cause notice]; 

(c)	 Your right to proceed further under the contract [or a specified portion of 

the contract, in the case of a partial determination for default] is hereby 

terminated; 

(d)	 In accordance with the termination clause of the contract, you may be 

held liable for any additional costs incurred by the judiciary in purchasing 

the goods or services terminated from other sources; 

(e)	 By issuance of this notice of termination, the contracting officer has 

determined that you failure to perform is not excusable. 

(f)	 The judiciary reserves all rights and remedies provided by law or under 

the contract in addition to its right to hold you liable for excess 

reprocurement costs. 

(g)	 You have the right to appeal the contracting officer’s termination of this 

contract under the Disputes clause of the contract.