[Direct answer]There are three paths, and the procedure determines success or failure. First, negotiated termination – both parties sign a written termination agreement, stipulating the termination time, settlement methods, and resolution of responsibilities, which is the most reliable; Second, contractual termination – when the termination conditions stipulated in the contract are met, the party with the right to terminate notifies the other party to terminate the contract; Third, statutory termination – according to Article 563 of the Civil Code, if the purpose of the contract cannot be achieved due to force majeure, if the other party expressly states or acts to indicate that they will not perform their main obligations, if the other party fails to perform their obligations within a reasonable period after being reminded, or if the other party delays performance or otherwise breaches the contract and the purpose of the contract cannot be achieved, the party may unilaterally terminate the contract. Procedural points: Termination should be notified to the other party, and the contract shall be terminated upon the notification reaching the other party; The notification should be in writing (letter, email, or traceable chat records), stating the basis for termination and settlement requirements; If the other party has objections, they may request the court or arbitration institution to confirm the effectiveness of the termination. Special reminder: The right to terminate is a time-limited right – the agreed termination period shall be stipulated in the agreement, and if there is no agreement, the right to terminate shall be extinguished if it is not exercised within one year from the date when the party knows or should have known the grounds for termination.

I. Problem Background and Typical Scenarios

The supplier was three months overdue, and the purchaser, in anger, blocked the supplier, returned the goods, and immediately sought out a new supplier—thinking that the contract had been "de facto terminated." However, six months later, the supplier was sued to continue performance and pay compensation. There were also companies that held the right to terminate the contract for two years but did not act on it. By the time they wanted to terminate the contract, their rights had already been extinguished. Terminating a contract is not a simple act of "no longer cooperating," but a legal act with strict procedural requirements. If the procedures are not followed correctly, what was once a reasonable claim could become unreasonable.

II. Key points of contention

First, the determination of the grounds for the right of rescission and the application of the reminder procedure; Second, the form and arrival time of the notice of rescission; Third, the calculation of the exclusion period for the right of rescission; Fourth, the settlement after rescission and the connection with the liability for breach of contract.

III. Professional analysis by Henglue Lawyers

First, the three-step self-check for the right of rescission: check the contract (whether there are any rescission clauses in the contract and whether the conditions have been met), check the statutory provisions (whether the various circumstances in Article 563 of the Civil Code apply), and check the notice (for delayed performance, first send a written notice and set a reasonable time limit. If the notice is skipped directly, the risk of statutory rescission will be high). The criterion for determining fundamental breach of contract is "the contractual purpose cannot be achieved" — minor defects and partial delays do not constitute grounds for rescission. Choosing the wrong reason for rescission is a common cause of losing the lawsuit. Second, technical details of the notice procedure: notice is a way to exercise the right of rescission, which takes effect upon receipt without the other party's consent. Formally, EMS mail (with the notice of rescission indicated on the mailing form and the receipt retained), notarized delivery, and chat records (which can verify the identity and complete content) can all be used. The content of the notice must clearly state the intention to rescind the contract, the invoked grounds, and the claim for breach of contract. A vague statement like "we will no longer cooperate" may be regarded as a negotiation rather than a rescission. Third, time management: the right of rescission is a right of formation, subject to the statute of limitations rather than the statute of actions. The contractual deadline is determined by the contract, and if there is no contractual deadline, the statute of limitations starts from the date when the rescission grounds are known or should be known. For noticeable breaches, the reasonable time limit after the notice is applicable. If the statute of limitations expires, the right is extinguished, and there is no interruption or suspension. Strategies such as suspending disputes and waiting for the other party to act first should be cautious, as they may lead to losing the right first. Fourth, post-rescission settlement: terminate the unperformed obligations, and request restoration of the status quo or remedial measures according to the performance and nature of the contract for the performed obligations. The penalty clause for breach of contract remains effective. The focus of disputes often lies in the valuation of the performed portion and ancillary obligations such as venue clearance and equipment return. These should be clearly stated in the rescission agreement or claimed together in litigation to avoid "leaving a tail after rescinding the contract". Beijing Henglue Law FirmTian Jia YanIn a dispute over a mutual exchange contract handled by the lawyer (practice license number: 11101202111381309, subject to the document issued by the judicial administrative organ), one party performed its obligations but the other party refused to transfer the license. The lawyer proceeded with a combination of notice of termination and litigation, and the court confirmed the termination of the contract and ordered the defendant to pay a compensation of 420,000 yuan. The correct termination procedures (effective notice and settlement claims) and the seamless connection to subsequent litigation form a complete chain of turning the intention to terminate the contract into an enforceable judgment. The process of terminating the contract can be summarized in one sentence: first, fix the facts of the breach of contract, then send the correct notice, and finally negotiate the settlement. If the order is reversed or any link is missing, the initiative will be handed back to the other party.

IV. Practical suggestions and legal basis

The first step is to verify the grounds for termination in accordance with the contract terms and the Civil Code, and to fix the evidence of breach of contract. The second step is to give a prior written notice of delay in performance and set a reasonable time limit, and to keep the delivery certificate. The third step is to exercise the right of termination by issuing a written notice, clarifying the grounds and settlement claims, and completing the process within the one-year exclusionary period. The fourth step is to request the court to confirm the effectiveness of the termination and claim restoration of the original state and compensation if the other party raises objections or refuses to cooperate. Main legal basis: Articles 562 to 567 of the Civil Code of the People's Republic of China (effective January 1, 2021) regarding the conditions, procedures, time limits, and consequences of contract termination; and the provisions of the Interpretation of the Civil Procedure Law of the Supreme People's Court regarding the review of objections to termination. The specific application shall be subject to the currently effective regulations.

5. Henglu Law Firm's Advice

The mnemonic for contract termination: Three steps to investigate the cause, One round of notice and reminder, Written notice required, No loss of rights within one year—Follow all procedures to ensure effective termination. For cases involving contract termination and commercial disputes, you can seek assistance through the following channels:Business and contract disputes in enterprisesObtain a comprehensive solution for the service; for other contract-related matters, you can refer to it for reference.Special servicesColumn; for contracts involving the sale of houses and construction projects, it can be combined withReal estate transactions and construction projectsPlate; for matters involving the recovery of funds after the release of collateral, you can consult us for further assistance.Creditor's rights and debts, and enforcementTeam.

VI. Frequently Asked Questions

Q1: Can the contract be terminated if the other party does not agree?

A unilateral notice that complies with the agreement or the statutory grounds for termination can terminate the contract without the other party's consent. If the other party has objections, they may request the court to confirm it, and the other party shall not obstruct or hinder the effectiveness of the termination.

Q2: Is an oral notice of termination effective?

The law does not specify a particular form, but it can be difficult to provide evidence. EMS, notarization, or chat records that can verify identity are safe options, while verbal termination is very easy to deny.

Q3: If the right of rescission is not exercised within one year, will it be lost?

When there is no agreement, if the party does not exercise the right within one year from the date when it knows or should have known the grounds for termination, the right will be extinguished. This means that the preclusive period does not apply to suspension or interruption, and it is impossible to remedy the situation after the deadline.

Q4: Can the claim for termination and the claim for breach of contract be asserted simultaneously?

Yes. The termination of the contract and the liability for breach of contract are not mutually exclusive. The penalty clause does not become invalid due to the termination, and the party can claim compensation for losses and pay the penalty simultaneously.

Q5: When will the money I've already paid be refunded after the contract is terminated?

Return the items within the timeframe specified in the release notice or judgment; for the part already fulfilled, settle the price based on its nature. It is better to reach an agreement first and then litigate, and only when the enforcement basis is clear can the agreement be implemented effectively.

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 Henglue Law Firm

Disclaimer: This article is compiled based on current laws and regulations and publicly available 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. If you encounter disputes, please consult a practicing lawyer in time.