If parties agreed that the contract will be automatically cancelled when some condition is met, would the contract be cancelled without notification to the other party？
Contract cancellation is one of the most important ways to terminate contractual right and obligation, and it’s a fundamental change of the contract status. As per the laws of China, the ways of cancellation of contract include: cancellation by negotiation, and cancellation by one party executing his right to cancel. The relevant expression of his will to cancellation shall be made to make all parties concious of that” whether the contract status has a fundamental change or not”. It depends on the party’s will to decide whether he will exercise his right to cancellation or not, and the relevant fact and reason
According toprovision 565 of China’s Civil Code,if one party claims to cancellation of contract in line with the law, he should notify the other party. The contract shall be cancelled when notification is reached to the other party; if it’s stated in the notification that the contract will be cancelled when the debtor fails to fulfill his debt in a specified timeframe, the contract shall be cancelled upon the timeframe expires. Either party could apply to court or arbitration to confirm the validation of the contract cancellation.
This legal provision puts emphasis on that : when one party exercise his right to cancellation based on agreement or legal stipulation, the party shall send a notification to the other party, expressing his definite will.
(This article is made by Mr.Wang Jingzhan from Tianjin Bozhuan Law Firm)