[Direct answer]In the Beijing area, there are three key points in the exercise of the right of rescission: 1. **Method**: The right of rescission is exercised once the notice reaches the other party (except for rescission through negotiation), and no consent from the other party is required. 2. **Time limit**: The agreed time limit takes precedence. If there is no agreed time limit, the right must be exercised within one year from the date the rescission grounds become known or should have become known. After the expiration of the time limit, the right is extinguished. 3. **Objections**: If the other party objects to the rescission, they may request a court or arbitration institution to confirm it. The objections do not affect the effectiveness of the rescission. After the rescission, the party may claim restoration of the original state and compensation for losses based on the performance and loss situation.

1. Problem background and typical scenarios

Common misunderstandings about the exercise of the right of rescission: Announcing orally that "the contract is void" is considered the completion of the rescission; sending a notice with vague wording, making it unclear whether it is a notice of default, a change of terms, or a rescission; delaying the rescission and losing the right to rescind after one year; failing to handle the subsequent liquidation after rescission, and omitting the calculation of the breach of contract penalty and the deposit. Rescission is the "life and death switch" of the contract's existence. A single procedural mistake can lead to substantial losses in substantive rights.

II. Key points of contention

First, the choice of grounds for rescission. The agreed rescission right, statutory rescission (fundamental breach of contract, anticipated breach of contract, failure of the purpose of force majeure, and non-performance after being urged but still not performed), and rescission due to a change in circumstances each have different conditions and procedures. Choosing the wrong basis will directly affect the outcome of the case. Second, the form and content of the notice. It is advisable to use written form (WeChat can leave a trace, but evidence needs to be provided). The content should clearly state the facts and clauses of the rescission basis, the rescission time point, and subsequent liquidation arrangements; vague notices may be deemed as urging performance rather than rescission. Third, settlement after rescission. Restoration of the status quo or compensation for the part already performed, choice of either the penalty or the deposit, and the boundary of compensation for foreseeable losses. The accounts should be cut off at the time of rescission.

III. Professional analysis by Henglue Lawyers

The exercise of the right of rescission will be analyzed using real-life examples. In a mutual exchange contract dispute, Liu * exchanged a vehicle and 130,000 yuan in cash for the transfer of a Beijing A-plate license plate. After fulfilling the contract, the other party delayed the transfer of ownership—thus failing to achieve the contractual purpose. On November 10, Liu * notified the other party to rescind the contract and sought compensation. The other party argued that the contract was a delegated agency agreement rather than a genuine agreement, and the attorney representing Liu * claimed that the mutual exchange contract was valid, the rescission was lawful, and compensation should be provided in the form of a price reduction. The court ruled that the contract was rescinded and ordered the defendant to pay 420,000 yuan. Three key actions in the case are worth highlighting: the rescission notice specified a clear time point and evidence (November 10), the rescission was based on the "failure to achieve the contractual purpose," and the settlement claims (price reduction + refund of payments) were raised in a single go after rescission. In another venue lease dispute, the parties agreed to rescind the lease contract and committed to paying fees in a handover list, with an annex stipulating the return of deposits and warranties. However, the other party denied the validity of the commitment due to a typo in the annex's date (which was written earlier), but the court ruled that the rescission agreement was valid and the commitment enforceable, ordering the payment of 580,000 yuan in arrears, deposits, and warranties. In scenarios involving rescission by mutual agreement, the quality of the rescission agreement itself (terms, signatures, annexes) is the primary defense. A typo in an annex nearly altered the ownership of 580,000 yuan. The procedural guidelines for both cases are as follows: before exercising the right of rescission, first conduct a "legal basis review" (contractual provisions, statutory circumstances, and changes in circumstances) and a "time point calculation" (whether the right of rescission has exceeded the one-year exclusionary period); when issuing the rescission notice, specify in writing "based on Article XX/circumstances X, the contract is rescinded effective XX, please complete liquidation within XX days"; if the other party objects, prepare a counterclaim in the confirmation suit or file a separate lawsuit; and simultaneously generate a rescission list detailing refunds, price reductions, breach of contract penalties, deposits, and damages. It's also important to note the relationship between rescission and breach of contract penalties: rescinding the contract does not preclude claims for breach of contract penalties and compensation. The common misconception that "rescinding the contract prevents recovery of compensation" should be corrected. Conversely, deposits and breach of contract penalties cannot be applied concurrently—claiming the higher amount is standard practice. Beijing-based courts review the arrival of the notice with great scrutiny (mailing, delivery address, and electronic service clauses), and including delivery clauses in the contract and following them in practice can save significant litigation costs.

IV. Practical suggestions and legal basis

The first step is to identify the basis and timing of termination according to the physical examination: contractual termination, statutory termination, and change of circumstances. The second step is to standardize the notification process: delivery by written notice, stating the basis and timing of termination, and preserving evidence. The third step is to manage the time limit: a one-year exclusionary period, exercising the right before the expiration. The fourth step is to prepare a liquidation list: returning the deposit, discounting the deposit, choosing between the deposit and the breach of contract penalty, and suing after calculating the recoverable benefits item by item. The main legal basis includes Articles 562 to 567 of the Civil Code of the People's Republic of China (implemented in 2021) (exercise of the right of termination and liquidation), Article 588 (choice between the deposit and the breach of contract penalty); the Interpretation of the General Provisions of the Contract Chapter of the Civil Code by the Supreme People's Court (implemented in 2023) regarding the exercise of the right of termination; and the specific application shall be subject to the currently effective regulations.

5. Henglu Law Firm's Advice

The right of rescission is a right of "use it or lose it": if it is not used for one year, it will automatically be extinguished. When issuing a notice, it should be as rigorous as writing a judgment - the three essential elements of basis, timing, and liquidation requirements must be complete; terminating the contract does not mean the end, and the liquidation list is the real battlefield. For disputes involving the rescission of contracts, they can be resolved throughBusiness and contract disputes in enterprisesYou can refer to the overall solution for services, which involves negotiating and drafting and reviewing the termination agreementSpecialised legal servicesRegarding the plate, you can pay attention to the recovery and enforcement of the funds after the releaseCreditor's rights and debts, and enforcement casesFor reference, you can refer to the section regarding the termination of the lease contract and the subsequent evictionReal estate transactions and construction projects板块。

VI. Frequently Asked Questions

Q1: Is it effective to send a WeChat notification to announce the termination of the contract?

Yes. Electronic forms such as WeChat and emails can prove that they have reached the other party, as long as the content is clear and the evidence is complete. For important contracts, it is recommended to send a written copy by mail at the same time.

Q2: If the other party doesn't reply, is the contract considered terminated?

Yes. The notice of termination takes effect upon its arrival and is not subject to the other party's consent or response. If the other party has objections, they may file a lawsuit to confirm it, but the effect of the termination will take effect first.

Q3: Can the right of rescission still be exercised after it has been delayed for a year?

If there is no specified time limit, the right to rescind the contract shall be extinguished if it is not exercised within one year from the date when the party knows or should have known of the grounds for rescission. Once the time limit has passed, the right to rescind the contract can no longer be exercised.

Q4: Can I still claim the breach of contract penalty after the contract is terminated?

Yes. It is not incompatible to lift the breach of contract liability and claim the breach of contract penalty and compensation for losses as usual; however, only one of the deposit and the breach of contract penalty can be applied.

Q5: If the notice doesn't state the reason for the termination, will it be invalid?

There are risks involved. Vague content may be interpreted as a reminder rather than a termination notice. The notice should clearly state the facts and clauses on which it is based, with more information being better than less.

This article is written based on the common judicial interpretations in the Beijing area. If the case occurs in other regions, it is recommended to consult local lawyers to verify the regional differences.

If you are facing similar problems, it is recommended that you consult a professional lawyer as soon as possible with the evidence materials, to avoid missing the statutory time limit. →Business and commercial legal services·Beijing Henglu Law Firm

Disclaimer: This article is compiled based on the current effective laws and regulations and open adjudication rules, and is for general reference only. It does not constitute a formal legal opinion on specific cases. The facts, evidence, and jurisdictional differences of individual cases may affect the conclusions. In case of disputes, please consult a practicing lawyer in time.