In Oregon, a contractual termination must be “clear and unambiguous, conveying an unquestionable purpose to insist on the rescission” (Stovall v. Publishers Paper Co., 584 P2d 1375 (Or. 1978), quoting 3 Black, On Rescission and Cancellation 1399 (2d ed. 1929)). The most telling case was from Stovall, where a landowner [Stovall] gave a paper company the right to log an area as long as they paid Stovall and built a road. When the parties began disagreeing over the road plans, Stovall had his attorney send a letter to the paper company stating, among other grievances, “[w]e are giving you notice herewith that pursuant to Paragraph 11 of the contract we are exercising Mr. Stovall’s option to terminate the Timber Cutting Agreement and all rights thereunder of your client and of their predecessor in interest. The cutting of any timber will be considered willful trespass, and treble damages will be sought under ORS 105.810.” On its own, it is a valid way to terminate a contract. However, either Stovall or his attorney gilded the lily and continued with several paragraphs suggesting how the paper company’s offer to build the road could be made better or acceptable, concluding with “[w]e otherwise intend to file our complaint immediately thereafter. Also, I don’t know if it would make any difference to your client, but Mr. Stovall indicated that if your client accepts the compromise offer and will be logging in the area, they might wish to know that he would be interested in selling to them the approximately 50 M board feet of timber on one of the adjoining parcels of land for a price of $5,000, which works out to be about $100/M.”
Said otherwise, the termination letter essentially stated, “I unequivocally terminate this offer. However, if you want to make the following changes, I’m glad to remain doing business with you.” The court therefore relied on a treatise about terminating contracts [Black, On Rescission and Cancellation], that stated the common law of contract termination: “where the conduct of one having the right to rescind a contract is ambiguous, and it is not clear whether he has rescinded it or not, he will be deemed not to have done so.” A letter of termination that includes terms about continuing negotiations is not seen as a letter of termination at all and is considered legally ineffective due to the ambiguity. Saying “I terminate, but retain absolute discretion for take-backsies” is not going to be treated as a valid notice of termination — the courts have already litigated the idea and concluded that the termination must be absolute, clear, and uncompromising.