What Is a Non-Renewal of Contract Letter?
A non-renewal of contract letter is a formal notice informing an employer or client that a contract or agreement will not be extended beyond its expiration date. It serves as a clear communication to the other party that the business relationship will end when the current contract expires, often providing insight into the reason for non-renewal.
The primary purpose of a non-renewal of contract letter is to prevent misunderstandings and potential legal disputes down the line. By clearly stating that the contract will not be renewed, the letter ensures that both parties are on the same page regarding the future of their professional relationship .
Non-renewal letters are commonly used in a variety of business contexts, such as with service providers, vendors, employees, or businesses you have hired for services. For example, a company may choose to send a non-renewal of contract letter to an employee nearing the end of their contract to formally inform them that their employment will terminate. Similarly, a business could write such a letter to a consulting firm they’ve employed for an extended period to let them know that they will not be hiring them again.
In essence, a non-renewal of contract letter serves as a professional and legally sound way to communicate the decision not to renew a contract, ultimately sparing both parties from any miscommunication or potential disruption of business as the contract reaches its end.
Contents of a Non-Renewal Letter
While there is no required "form" that a nonrenewal letter should take, a non-renewal letter should contain certain elements:
- A salutation addressed to the employee.
- A specific statement that the contract is not being renewed.
- A listing of the reasons for the non-renewal.
- The date the non-renewal letter is being provided to the employee.
- The effective end date of the employment contract.
- The final paycheck date.
- A statement regarding whether the employee will be able to return as a substitute teacher for the school district after the non-renewal letter is provided.
- Any other specific, unique, or additional information that may be applicable in a given situation.
Legal Implications of a Non-Renewal
In addition to the specific contractual provisions which must be considered, there are additional legal aspects to this process which require examination and consideration. For example, many of these ‘newer’ agreements have a no-cause, automatic renewal clause, which results in either early annual termination, or an automatic extension of the term of the agreement for an additional year unless a notice of intention not to renew it is provided in writing 60 days prior to the end of the then current term. If oral or written notice of non-renewal is provided by the agreement holder, it is a notice of non-renewal in the absence of some mutually acceptable basis whereby both parties have agreed something different: they cannot refuse to honor the notice. However, if the no-cause, automatic renewal provision is contained in the agreement that the business person is operating under, it is necessary to comply with all of those requirements, endings being no more than 60 days prior to the end of the agreement’s term, even if such a notice has already been provided. While most attorneys would believe that a letter of non-renewal is just that, because of the propensity for litigation in every possible situation, prior to providing such a notice of non-renewal, check with the professional who negotiated the agreement, and if there is any question as to the proper notice procedure, check with your attorney as well.
How to Write a Non-Renewal Letter
1. Be professional.
The letter should be written in a manner that reflects a professional, unemotional demeanor even though the decision may have been very painful to make.
2. Be included in the general notice.
It is much better to include the individual non-renewal letter with the rest of the annual notices, and send them all simultaneously, rather than sending it after the other notices have been sent. It is easier to explain on the phone how the letter mistakenly went out prematurely. Sending the letter out on its own or at a different time leaves a lingering question that may not be as easily explained away.
3. Be concise and specific.
The letter should clearly state the fact that the employment will end at the expiration of the contract. In some instances it may require a general statement of why that decision was made; however, the letter should not contain too much information. Too much information can result in an accusation by the individual that the employer relied upon some impermissible factor other than performance. To the extent additional details and explanation are necessary, it is better to have those be the subject of a phone conversation, or even a separate letter or email to avoid the risk of giving an impression that the non-renewal was the result of factors other than just business judgment.
Sample Non-Renewal of Contract Letter
[Your Name]
[Your Address]
[City, State, Zip Code]
[Date]
[Principal’s Name]
[School’s Name]
[School’s Address]
[City, State, Zip Code]
RE: Non-Renewal of Contract
Dear [Principal’s Name]:
This is my formal, written letter stating that I do not wish to have my contract for the 20XX/20YY school year renewed. As you know, I was hired to teach [insert subject or grade taught], and I have taught that subject/grade at [insert school name] since [insert school year you began teaching at this school]. I appreciate the experiences that [insert school name] has provided me, and I am grateful to have been a part of [insert school name] during that time. However, I must regrettably inform you that I have decided to pursue work outside of [insert school name] and in a different field of my choosing. Therefore , please consider this letter my official notification that I will not be accepting a contract for the 20YY/20ZZ school year.
I have been very fortunate during my time here at [insert school name] to have had the following experiences:
[List experiences you have had in the last one, two, or three years that make you a asset to the school, including any extracurricular activities, mentorships, etc.]
[Include any personal information you want the principal to know. This could include whether you plan to move away from the area, what your plans are for the future, or something else you think is important for them to know.]
This letter is to serve as official notice that I am relinquishing my contract for the 20XX/20YY school year.
Sincerely,
[Your Signature (for a hard copy)]
[Your Typed Name]
Errors to Avoid
A common mistake that people make when drafting a non-renewal of contract letter is not providing enough notice. Educators are entitled to a minimum notice of the decision not to renew which is 8 weeks prior to the end of the school year for teachers and administrators while special education employees must be provided 4 weeks notice. While notice is important, it is also crucial to be reasonable about the timing of the letter as well. For instance, if a staff member was involved in a dispute during the year, the Board may be able to non-renew regardless of the notice. Another mistake that we have seen is when the notice fails to clearly state the reasons for the non-renewal and essentially says, "No reason is required but put something in there." While we understand this viewpoint, the Board must still decide whether they are choosing not to renew or if they are terminating for cause. If it is the latter, the Board should provide the employee with the reasons for termination or non-renewal and an opportunity for a hearing to present their evidence and argument, unless there is misconduct from the employee or some other situation that requires an employee to be immediately removed from the premises.
Frequently Asked Questions Regarding a Non-Renewal Letter
Is there a difference between an "intention not to renew" letter and a "nonrenewal of contract" letter? Not necessarily. Though the titles may vary, these letters usually serve the same purpose, namely to provide advance notice of a decision not to renew an existing contract for the future year. The notice can be given for any reason (or no reason) at all, provided it does not violate the terms of the contract or an applicable law.
Does a nonrenewal of contract letter require a reason? No. Unless the contract states that a reason is required, the district does not need to justify the decision to non-renew an employee. Generally speaking, however, boards grant nonrenewals for one of three reasons: performance issues, decline in student enrollment, or budget reduction.
If I am nonrenewed, do I have the right to a hearing or appeal? Some contracts require either a hearing or an appeal after nonrenewal, while other contracts do not provide that right. If a contract does not require a hearing , the district still may provide one to the employee if it wishes to do so. If a contract requires a hearing and the district does not hold one, the employee may appeal the decision to the State Board for Educator Certification (SBEC). SBEC does not have jurisdiction to review non-renewals if a contract does not provide for a right to a hearing or appeal.
My contract provides for a right to a hearing; what do I need to do to exercise this right? Check with the district’s personnel office—or ask your principal—to determine the process for requesting a hearing. If the process is not spelled out, your contract should indicate the number of days you have to request a hearing, after being given the notice of non-renewal. Most teachers have ten days to request a hearing with the board of trustees. The request must be made in writing, and should include the date you received the nonrenewal notice from the district.