In general, the effect of the termination of a contract is to discharge the parties from their unperformed obligations under the contract. However, termination does not affect liabilities of the parties for breaches of the contract that occurred prior to the contract being terminated.

The primary consequence of canceling a contract—often legally referred to as termination or rescission—is the release of all parties from their future "executory" obligations. This means that once the contract is canceled, you are no longer required to perform the services or provide the goods originally promised. However, cancellation does not magically erase past breaches; parties may still be liable for damages or "restitution" for work already performed or money already paid. If a contract is "rescinded," the goal is typically to return both parties to the exact state they were in before the contract existed, which may involve the return of deposits or property. If a contract is terminated due to a breach, the "innocent" party is usually entitled to compensatory damages to cover any financial losses suffered. In some cases, specific clauses like confidentiality or dispute resolution survive the cancellation and remain legally binding even after the main agreement is dead.