Dear …

As you are aware, we have encountered some __(problems/situations)__ with your company over the past __(# months/weeks/days)__ that have given us grave concern. We have had to make some tough decisions on how to handle this matter.

__(company name-ours)__ has built its good reputation on the high level of __(business practices/service/integrity/expertise/etc)__ that we offer to our customers. We have been proud to uphold this kind of reputation for __(# )__ years now and our customers have responded well to it. Unfortunately, with these recent developments with __(Company name-theirs)__, we see a continued relationship with your company as a threat to our good name.

Though we’ve tried to resolve these matters with you, it does not appear that we can reach a mutual agreement on the way we wish to conduct business. As a result of __(this situation with/this trust issue with/these complaints received about/etc)__ __(company name-theirs)__, we believe that our __(service to/reputation with/trust with/expertise to/etc)__ our customers has been compromised. Consequently, we have decided it is in our best interest to sever our business relationship with __(company name-theirs)__.

Effective __(date)__, __(Company name-ours)__ will no longer be __(utilizing /purchasing)__ the __(products/services)__ from __(company name)__. All current __(jobs in progress/projects in progress/inventory/etc.)__ will be __(briefly explain how it will be handled)__. We have advised all of our staff and customers of this decision and ask that you please ensure that your employees are also made aware of this.

It is with regret that it did not work out between our two companies. I know we both had high expectations going into it. Indeed, it is most unfortunate.

Yours truly,