Legal basis: Civil Code of People's Republic of China (PRC).
Article 502 A lawfully formed contract shall become effective upon its formation, unless otherwise provided by law or agreed by the parties.
Article 565 If one party claims to terminate the contract according to law, it shall notify the other party. When the notice reaches the other party, the contract is terminated; If the notice states that the debtor fails to perform the debt within a certain period of time, the contract will be automatically terminated. If the debtor fails to perform the debt within the time limit, the contract will be terminated at the expiration of the time limit specified in the notice. If the other party disagrees with the termination of the contract, it may request a people's court or an arbitration institution to confirm the validity of the termination of the contract.
If one party brings a lawsuit or applies for arbitration to claim the termination of the contract without notifying the other party, and the people's court or arbitration institution confirms this claim, the contract shall be terminated when a copy of the complaint or arbitration application is served on the other party.
Article 566 If the contract has not been performed after dissolution, the performance shall be terminated; If it has been performed, according to the performance and the nature of the contract, the parties may request restitution or take other remedial measures, and have the right to claim compensation for losses. Where the contract is terminated due to breach of contract, the creditor may require the breaching party to bear the liability for breach of contract, unless otherwise agreed by the parties. After the termination of the main contract, the guarantor shall still be liable for the civil liability of the debtor, unless otherwise agreed in the guarantee contract.
Article 567 Termination of rights and obligations under a contract shall not affect the validity of the settlement and liquidation clauses in the contract.