The Injured Party May Have the Right of Cancellation

Cancellation is a variation of rescission. It exists only for breach of contract for the sales of goods. The injured party — either buyer or seller — may cancel the contract and return consideration received.

When a breach of contract occurs, the injured party is entitled to be in the same position he or she would have been in if the contract had been performed. The parties frequently negotiate a settlement directly or with the help of their lawyers. If they do not reach a settlement, the injured party may sue to recover damages — money awarded by the court for loss or injury caused by incomplete performance or failure to perform.

However, the victim of the breach of contract is required to mitigate damages. This means that damages must be reduced by any means reasonable under the circumstances. For a victimized buyer it might require buying substitute goods elsewhere possible or getting someone else to perform the service. For an employee unfairly discharged, it could require promptly seeking and accepting similar employment elsewhere.