The Non Performance Termination Letter is a crucial legal instrument under German law used when one party needs to formally terminate a contract due to the other party's failure to fulfill their contractual obligations. It is typically employed after previous attempts to resolve performance issues have failed. The document must comply with German Civil Code requirements, particularly §323 and §314 BGB, and should clearly establish the grounds for termination, document the specific instances of non-performance, and outline the legal and practical consequences of the termination. This type of letter is particularly important as it creates a formal record of the termination and helps protect the terminating party's legal position in potential future disputes.
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1. Sender and Recipient Details: Full legal names and addresses of both parties, including contract reference numbers
2. Contract Reference: Clear identification of the contract being terminated, including date of execution and parties
3. Statement of Non-Performance: Detailed description of the specific breaches or failures to perform, including dates and specific instances
4. Legal Basis for Termination: Reference to relevant contract clauses and statutory provisions (particularly §323 and §314 BGB) justifying the termination
5. Prior Notifications: Reference to any previous warnings, cure notices, or communications regarding the non-performance
6. Termination Declaration: Clear and unequivocal statement of termination and its effective date
7. Consequences of Termination: Overview of immediate effects and obligations following termination
8. Signature Block: Formal closing, date, and signature of authorized representative
1. Demand for Damages: Include when seeking compensation for losses resulting from the non-performance
2. Return of Property: Include when there are materials, equipment, or confidential information to be returned
3. Outstanding Payments: Include when there are unpaid invoices or financial claims to be settled
4. Reservation of Rights: Include when preserving the right to pursue additional remedies or claims
5. Transition Arrangements: Include when specific arrangements are needed for handover or transition of services
1. Evidence of Non-Performance: Documentation, correspondence, or other evidence demonstrating the breach
2. Prior Notices: Copies of previous warnings or notices regarding the non-performance
3. Damage Calculation: If claiming damages, detailed calculation and supporting documentation
4. Original Contract: Copy of the original contract being terminated
5. Performance Records: Relevant performance reports, quality assessments, or other documentation showing failure to meet obligations
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