Termination Of Contract Due To Non Performance for Malaysia

Termination Of Contract Due To Non Performance Template for Malaysia

This document serves as a formal notice of contract termination under Malaysian law, specifically addressing situations where one party has failed to perform their contractual obligations. It is structured in accordance with the Malaysian Contracts Act 1950 and related legislation, providing a comprehensive framework for ending a contractual relationship due to non-performance. The document includes detailed specifications of the breach, references to prior notifications, and outlines the consequences of termination, including immediate obligations and financial settlements. It incorporates necessary provisions for asset returns, ongoing obligations, and dispute resolution mechanisms while ensuring compliance with Malaysian legal requirements for contract termination.

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What is a Termination Of Contract Due To Non Performance?

The Termination of Contract Due to Non Performance document is a crucial legal instrument used when one party needs to formally end a contractual relationship due to the other party's failure to fulfill their obligations. This document is particularly relevant in the Malaysian business context, where it must comply with the Contracts Act 1950 and related legislation. It is typically employed after attempts to remedy the breach have failed and serves to document the termination process, protect the terminating party's interests, and establish a clear record of the breach and its consequences. The document should be used when there is clear evidence of material breach or persistent non-performance, and the terminating party has followed proper procedures including giving notice and opportunity to remedy (where required). It includes comprehensive details about the breach, termination terms, outstanding obligations, and post-termination requirements, making it a vital tool for risk management and legal compliance.

What sections should be included in a Termination Of Contract Due To Non Performance?

1. Parties: Identification of all parties to the contract, including full legal names, registration numbers, and addresses

2. Background: Brief overview of the original contract, its date, purpose, and key terms

3. Definitions: Definitions of key terms used in the termination notice

4. Details of Contract Breach: Specific details of the non-performance or breaches, including dates, instances, and impact

5. Prior Notifications: Summary of previous communications regarding the breach, including warnings and opportunities to remedy

6. Legal Basis for Termination: Reference to specific contract clauses and legal provisions supporting the termination

7. Effective Date of Termination: Clear statement of when the termination takes effect

8. Immediate Obligations: List of actions required from both parties upon termination

9. Outstanding Payments: Statement of any outstanding payments or financial settlements required

10. Return of Property: Requirements for return of any physical or digital assets

11. Governing Law: Confirmation that Malaysian law governs the termination

12. Execution: Signature blocks and execution details

What sections are optional to include in a Termination Of Contract Due To Non Performance?

1. Survival Clauses: Specifies which provisions of the original contract survive termination - include if there are ongoing obligations

2. Intellectual Property Rights: Addresses the handling of IP rights post-termination - include if IP was involved in the contract

3. Confidentiality Obligations: Reinforces ongoing confidentiality requirements - include if sensitive information was shared

4. Dispute Resolution: Specific procedures for handling disputes related to the termination - include if high-value contract or complex relationship

5. Transition Arrangements: Details of any transitional period or handover requirements - include if service continuity is critical

6. Third Party Rights: Addresses impact on any third party beneficiaries - include if third parties are affected

7. Insurance and Indemnity: Specific provisions about ongoing insurance or indemnity obligations - include if there are potential future claims

8. Non-Competition/Non-Solicitation: Reinforcement of any post-termination restrictions - include if these were in original contract

What schedules should be included in a Termination Of Contract Due To Non Performance?

1. Schedule A - Original Contract: Copy of the original contract being terminated

2. Schedule B - Breach Documentation: Detailed log of all instances of non-performance with supporting evidence

3. Schedule C - Prior Correspondence: Copies of all relevant notices, warnings, and communication regarding the breach

4. Schedule D - Financial Statement: Detailed breakdown of outstanding amounts, payments due, or financial settlements

5. Schedule E - Asset Register: List of all physical or digital assets to be returned or transferred

6. Schedule F - Handover Plan: If applicable, detailed plan for transitioning services or responsibilities

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

Malaysia

Publisher

Genie AI

Document Type

Termination Letter

Cost

Free to use
Relevant Industries

Manufacturing

Construction

Information Technology

Professional Services

Retail

Healthcare

Financial Services

Telecommunications

Real Estate

Energy

Transportation

Education

Hospitality

Relevant Teams

Legal

Procurement

Operations

Finance

Compliance

Risk Management

Contract Administration

Project Management

Commercial Operations

Business Development

Executive Leadership

Administration

Relevant Roles

Chief Executive Officer

Managing Director

Legal Counsel

Contract Manager

Procurement Manager

Operations Director

Chief Financial Officer

Risk Manager

Compliance Officer

Project Manager

Business Development Manager

Commercial Director

General Manager

Company Secretary

Legal Director

Industries
Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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