What does "cancellation" of a contract signify?

Cancellation of a contract signifies that the agreement has been terminated, typically due to the breach of one party. In this context, when one party fails to fulfill their obligations under the contract, the other party possesses the right to cancel the agreement as a remedy for that breach. This cessation is not contingent on mutual agreement, but rather it arises from the failure of one party to adhere to the terms established in the contract.

In legal terms, cancellation due to breach often allows the non-breaching party to pursue remedies, such as damages or restitution, because the contractual relationship has been disrupted by the violation of the agreed-upon terms. Understanding this concept is crucial when studying contract law and the rights and responsibilities of parties involved in a contractual agreement.