Cancellation

In foreign trade, 'Cancellation' refers to the legal act by which one party to a contract, for specific reasons (such as changes in the buyer's market, the seller's inability to supply goods, force majeure, etc.), unilaterally or through mutual negotiation terminates an already effective order, contract, letter of credit, or other legal instrument. Usage scenarios include: the buyer cancels an order, the seller cancels delivery, the issuing bank cancels a letter of credit, etc. Precautions: Cancellation must distinguish between 'revocable' and 'irrevocable' contracts/letters of credit; cancellation of an irrevocable letter of credit must be agreed by all parties; unilateral cancellation may constitute a breach of contract and entail liability for damages. Unlike 'Rescission,' cancellation usually targets obligations not yet performed, whereas rescission may involve restitution; compared with 'Termination,' cancellation emphasizes the early ending of an already established legal relationship. Foreign trade practitioners should specify cancellation conditions, notice periods, and cost allocation in the contract to avoid disputes.