Question
How do I cancel a business contract for nonpayment?
My client stopped paying—can I end the deal and protect my cash flow?
Answer
Nonpayment is usually a breach of contract. Contracts sometimes allow termination for nonpayment, depending on the terms.
- Review your contract. Check payment terms, what counts as breach, any “cure period,” and how notices must be sent.
- Send a notice of default. List the unpaid amount, what you delivered, and the clause they’re breaking. Give the cure period (often 7–30 days).
- Keep records. Save invoices, emails, delivery receipts, and proof of notice (certified mail or e-signature).
- Terminate if needed. If the contract allows, you may have the option to terminate the contract after the cure period.
These steps aim to show you acted fairly and preserve leverage for negotiation, collections, or legal remedies.
What to consider in your specific situation
Your options can vary based on contract terms, local laws, and business risk. Small wording changes or facts can change your options and timing.
- Contract payment terms and cure period.
- Required notice and delivery method.
- State law and interest rights.
- Proof of work and invoices.
- Project stage and IP ownership.
For more information about how your contract terms apply, consider using Rocket Copilot or a Legal Pro to better understand your notice options and timelines.
At Rocket Lawyer, we follow a rigorous editorial policy to ensure every article is helpful, clear, and as accurate and up-to-date as possible. This page was created, edited and reviewed by trained editorial staff who specialize in translating complex legal topics into plain language, then reviewed by experienced Legal Pros—licensed attorneys and paralegals—to ensure legal accuracy.
Please note: This page offers general legal information, but not legal advice tailored for your specific legal situation. Rocket Lawyer Incorporated isn't a law firm or a substitute for one. For further information on this topic, you can Ask a Legal Pro.
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Explore more breach of contract questions & answers
Explore more questions about breach of contract due to non-payment
When someone fails to pay for goods or services after receiving them, it can qualify as a breach of contract. These questions cover your options for collecting payment and enforcing your rights.
- How do I cancel a business contract for nonpayment?
- Can a contractor sue for nonpayment without a contract?
- What should I include in a demand letter to get paid?
- What if they refuse my certified demand letter?
- Is there a time limit to collect money I’m owed?
- My client only paid half—how can I get the rest?
- Can I collect late fees after a client paid late?
- Client keeps delaying payment—what are our options?
- See even more questions about breach of contract
Explore Rocket Lawyer solutions that can help you move forward
Whether you’re drafting agreements, reviewing contracts, or starting a business, Rocket Lawyer offers expert support to make legal tasks easier and more affordable.
- Get your contract reviewed by Rocket Copilot or a Legal Pro
- Connect with a Legal Pro for quick answers to questions
- Make personalized documents that are vetted by lawyers
- Get help forming your business and submitting filings
Disclosures
- This page offers general legal information, not legal advice tailored for your specific legal situation. Rocket Lawyer Incorporated isn't a law firm or a substitute for one. For further information on this topic, you can Ask a Legal Pro.