Rejecting a proposal requires a delicate balance of clarity and politeness. It's crucial to communicate the rejection clearly, citing specific reasons if possible, while maintaining a respectful tone. Omitting necessary details or being overly vague can lead to misunderstandings or strained relationships. Therefore, it's essential to craft the letter with care, ensuring it conveys the decision firmly yet courteously.
Sample Letter for Proposal Rejection
To,
____________ (Name),
____________ (Address)
Date: __/__/____ (Date)
From,
The Manager,
____________ (Your Company),
____________ (Address)
Subject: Response in reference to proposal _________ (proposal details)
Respected Sir/Madam,
I am writing this letter to inform you that I am ________ (Name) and I am writing this letter on behalf of M/s _________ (Name Of Company).
With reference to the proposal received from your side having __________ (reference number/acknowledgment number – if any) no. __________ (reference number/acknowledgement number) on __/__/____ (Date). I regret to inform you that the proposal is not accepted due to reason ____________ (not economically favorable/ terms and conditions not matched/ criteria not fulfilled/ didn’t reach expectations/any other).
We appreciate the interest you have shown and we wish to have a good business with you in the coming time.
Thanking You,
Yours Truly/ Thankfully,
____________ (Signature),
____________ (Name),
____________ (Address)
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Kshitij Tarun 
Rahul Sharma