California · Commercial Code

COM §10505: (a) On cancellation of the lease contract, all obligations that are still executory on both sides are discharged, but any right based on prior default or performance survives, and the canceling party

What this law says, in plain English

When a lease contract is canceled, unfinished obligations end for both parties, but rights from prior defaults or performance remain enforceable.

Read the full statutory text

(a) On cancellation of the lease contract, all obligations that are still executory on both sides are discharged, but any right based on prior default or performance survives, and the canceling party also retains any remedy for default of the whole lease contract or any unperformed balance. (b) On termination of the lease contract, all obligations that are still executory on both sides are discharged but any right based on prior default or performance survives. (c) Unless the contrary intention clearly appears, expressions of “cancellation,” “rescission,” or the like of the lease contract may not be construed as a renunciation or discharge of any claim in damages for an antecedent default. (d) Rights and remedies for material misrepresentation or fraud include all rights and remedies available under this division for default. (e) Neither rescission nor a claim for rescission of the lease contract nor rejection or return of the goods may bar or be deemed inconsistent with a claim for damages or other right or remedy.

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