Mutual Rescission

Mutual rescission occurs when both parties in a contract agree to cancel or undo their contractual obligations. It effectively nullifies the original agreement, returning both parties to their pre-contract positions, as if the contract never existed. This process requires a mutual understanding and consent, often accompanied by a new agreement or settlement. Mutual rescission is used to resolve disputes or change circumstances, allowing both sides to part ways amicably without legal penalties. It’s different from breach or termination because it involves an active agreement to revoke the original contract altogether.