Mutual Rescission

In one sentence

Both parties agreeing to cancel a contract and release each other from all obligations.

Plain English

Mutual rescission happens when both parties to a contract agree to cancel it and walk away from all their duties. Unlike an accord, which modifies the contract terms, rescission completely ends the contract as if it never existed. Both parties must agree, and typically neither party owes the other anything after rescission occurs.

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Example

You sign a one-year gym membership, but after two months, you and the gym agree to cancel the contract. You stop paying, and the gym releases you from the remaining months. This is mutual rescission.

Used in a sentence

“The parties executed a mutual rescission agreement, terminating the contract and releasing each other from all future obligations.”

Related terms

Discharge of Contract

The release of both parties from their contractual obligations.

Accord

An agreement to settle a dispute by accepting different performance than originally promised.

Satisfaction

The actual completion of the agreed-upon performance in an accord.

Release

A written agreement giving up a legal right or claim.

Mutual Consent

Both parties freely agree to the same terms of a contract without pressure or misunderstanding.

Good Faith

An obligation to act honestly and fairly in performing or enforcing a contract.

Offer

A proposal to enter into a binding agreement on specific terms.

Acceptance

Agreeing to the exact terms of an offer, creating a binding contract.

This page is a plain-English reference and is not legal advice. Laws vary by jurisdiction and change over time. For specific situations consult a licensed attorney.