                                 CODE OF VIRGINIA

CANCELLATION (§ 59.1-508.2)

a. An aggrieved party may cancel a contract if there is a material breach that
has not been cured or waived or the agreement allows cancellation for the
breach.

b. Cancellation is not effective until the canceling party gives notice of
cancellation to the party in breach, unless a delay required to notify the party
would cause or threaten material harm or loss to the aggrieved party. The
notification may be in any form reasonable under the circumstances. However, in
an access contract, a party may cancel rights of access without notice.

c. On cancellation, the following rules apply:

   1. If a party is in possession or control of licensed information,
   documentation, materials, or copies of licensed information, the following
   rules apply:

A. A party that has rightfully refused a copy shall comply with &#xA7;
59.1-507.6 (b) as to the refused copy.

B. A party in breach of contract which would be subject to an obligation to
deliver under &#xA7; 59.1-506.18, shall deliver all information, documentation,
materials, and copies to the other party or hold them with reasonable care for a
reasonable time for disposal at that party&#8217;s instructions. The party in
breach of contract shall follow any reasonable instructions received from the
other party.

C. Except as otherwise provided in subparagraphs (A) and (B), the party shall
comply with § 59.1-506.18.

   2. All obligations that are executory on both sides at the time of
   cancellation are discharged, but the following survive:

A. any right based on previous breach or performance; and

B. the rights, duties, and remedies described in § 59.1-506.16 (b).

   3. Cancellation of a license by the licensor ends any contractual right of the
   licensee to use the information, informational rights, copies, or other
   materials.

   4. Cancellation of a license by the licensee ends any contractual right to use
   the information, informational rights, copies, or other materials, but the
   licensee may use the information for a limited time after the license has been
   canceled if the use:

A. is within contractual use terms;

B. is not for distribution and is solely part of measures reasonable under the
circumstances to avoid or reduce loss; and

C. is not contrary to instructions received from the party in breach concerning
disposition of them.

   5. The licensee shall pay the licensor the reasonable value of any use after
   cancellation permitted under paragraph (4).

   6. The obligations under this subsection apply to all information,
   informational rights, documentation, materials, and copies received by the
   party and any copies made therefrom.

d. A term providing that a contract may not be canceled precludes cancellation
but does not limit other remedies.

e. Unless a contrary intention clearly appears, an expression such as
&#8220;cancellation,&#8221; &#8220;rescission,&#8221; or the like may not be
construed as a renunciation or discharge of a claim in damages for an antecedent
breach.

HISTORY: 2000, cc. 101, 996.