The Project Cancellation Letter is a crucial document used when a project needs to be terminated before its planned completion. It is designed to comply with Hong Kong's legal framework, particularly the Contract Ordinance (Cap. 623) and related business regulations. This document is typically used when factors such as changed business circumstances, force majeure events, or strategic decisions necessitate project termination. The letter must balance legal requirements with practical business considerations, including clear communication of the cancellation decision, financial implications, and next steps. It serves as both a legal record and a professional communication tool, often used in conjunction with project close-out procedures and final settlements. The document should be drafted with consideration of potential dispute resolution needs while maintaining professional relationships for future business opportunities.
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1. Recipient Details: Full name, title, and address of the recipient, including company name
2. Project Reference: Clear identification of the project being cancelled, including project name, reference numbers, and original contract date
3. Cancellation Statement: Clear and unambiguous statement of project cancellation, including effective date
4. Cancellation Grounds: Brief explanation of the reasons for cancellation, referring to relevant contract clauses if applicable
5. Current Status Summary: Brief overview of the project's current status, including work completed and pending
6. Financial Settlement: Clear statement of financial implications, including final payments, refunds, or outstanding amounts
7. Next Steps: Outline of immediate actions required from both parties
8. Contact Information: Details of who to contact for queries or further discussion
1. Transition Plan: Include when handover of work or materials is required, detailing the transition process
2. Confidentiality Reminder: Include when project involves sensitive information, reiterating ongoing confidentiality obligations
3. Resource Reallocation: Include when there are specific instructions regarding project resources, equipment, or personnel
4. Legal Reservations: Include when necessary to preserve legal rights or when disputes are anticipated
5. Future Cooperation: Include when maintaining future business relationships is important, expressing openness to future collaboration
1. Schedule A - Project Status Report: Detailed breakdown of completed work, pending items, and deliverables
2. Schedule B - Financial Statement: Detailed breakdown of all financial matters, including payments made, outstanding amounts, and final settlement figures
3. Schedule C - Asset Register: List of project assets, materials, or equipment requiring return or redistribution
4. Appendix 1 - Supporting Documentation: Copies of relevant notices, communications, or other documents supporting the cancellation
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