Updated August 01, 2023
A purchase agreement termination letter is a document signed by both the buyer and seller upon the cancellation of a sales contract. The purpose of the letter is to recognize that each party of the transaction agrees to hold each other harmless for any claim that may arise from the terms stated in the purchase agreement.
In addition, the letter states where the earnest money deposit shall be returned and the amount that is to be released (using a release form). After authorization, the agent or third (3rd) party holding the escrowed funds will be obligated to return to the party stated in the letter.