If two parts of the world become disconnected for whatever reason, each fragment will continue operating on its own fork of the blockchain. Once these parts have reconnected, clients will automatically accept the longest of the two chains, invalidating everything that happened on the shorter chain since the split.
so this means the transactions that the shorter version of blockchain have will become cancelled?
Many will. Yes.
Any transaction that can trace any of its history back to block rewards that occurred in the orphaned chain will cease to exist as valid transations.
Transactions that are completely funded from block rewards that occurred prior to the split will simply become unconfirmed and be added back to the memory pool to be re-confirmed, unless any user in the forked chain transaction history leading up to that transaction happened to have somehow created transactions using the same unspent output from before the fork in both forks.