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New Zealand law explained for everyone

Contract and Commercial Law Act 2017

Contracts legislation - Contractual remedies - Cancellation

42: Effect of cancellation

You could also call this:

“What happens when you cancel a contract”

When you cancel a contract, a few things happen. First, if there are parts of the contract that haven’t been done yet, you don’t have to do them anymore. Also, the other person doesn’t have to do their part either.

If you’ve already done some parts of the contract before cancelling it, like giving something or paying money, you don’t automatically get those things back just because you cancelled.

There are other rules about cancelling contracts, so this isn’t the whole story. You’ll need to look at other parts of the law too.

Even if you cancel a contract, you can still ask for money (called damages) if the other person lied to you, refused to do what they promised, or didn’t follow the contract properly.

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Part 2 Contracts legislation
Contractual remedies: Cancellation

42Effect of cancellation

  1. When a contract is cancelled, the following provisions apply:

  2. to the extent that the contract remains unperformed at the time of the cancellation, no party is obliged or entitled to perform it further:
    1. to the extent that the contract has been performed at the time of the cancellation, no party is, by reason only of the cancellation, divested of any property transferred or money paid under the contract.

      1. This section is subject to the rest of this subpart.

      2. Nothing in this section affects the right of a party to recover damages for a misrepresentation or the repudiation or breach of the contract by another party.

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