The Regret Letter For Cancellation Of Purchase Order is an essential business document used when a company needs to formally withdraw from a purchase commitment. This document is particularly important in the Indian business context, where it must comply with the Indian Contract Act, 1872, and the Sale of Goods Act, 1930. It serves multiple purposes: legally documenting the cancellation, maintaining professional relationships, and providing a clear audit trail for accounting and compliance purposes. The letter should be used whenever a company needs to cancel a purchase order before delivery or completion, whether due to changed business circumstances, budget constraints, specification changes, or other valid reasons. It typically includes key information such as the original purchase order details, reason for cancellation, effective date, and any applicable compensation or alternative arrangements.
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1. Letter Header: Company letterhead including full legal name, address, contact details, and date
2. Recipient Details: Full name, designation, company name and address of the recipient
3. Reference Line: Subject line clearly stating 'Cancellation of Purchase Order' and relevant PO number
4. Purchase Order Details: Specific details of the original purchase order including date, order number, and brief description of goods/services ordered
5. Cancellation Statement: Clear and direct statement of cancellation with effective date
6. Reason for Cancellation: Brief but specific explanation for the cancellation
7. Apology and Professional Courtesy: Professional expression of regret for any inconvenience caused
8. Future Business Reference: Statement maintaining good business relations for future opportunities
9. Closing and Signature: Professional closing, signature block with name and designation of the authorized signatory
1. Compensation Details: Include when there are any payments or compensation to be made for cancellation charges or work already performed
2. Alternative Solutions: Include when offering alternative arrangements or substitute orders
3. Legal Compliance Statement: Include when cancellation has specific legal implications or requirements
4. Return of Materials: Include when there are materials or documents that need to be returned
5. Confidentiality Reminder: Include when the original order involved confidential information or trade secrets
1. Original Purchase Order: Copy of the original purchase order being cancelled
2. Cancellation Calculations: If applicable, detailed breakdown of any cancellation charges or refunds
3. Supporting Documentation: Any relevant documents supporting the reason for cancellation (e.g., force majeure evidence, market conditions reports)
4. Communication History: Record of relevant prior communications regarding the purchase order
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