Mutual Rescission Agreement Template: Cancel Contract & Release

MUTUAL RESCISSION OF CONTRACT FAQ

What is a Mutual Rescission of Contract?

A Mutual Rescission of Contract is a written agreement in which both parties agree to cancel their prior contract and release each other from further obligations.

Why is a Mutual Rescission important?

It provides legal clarity, avoids disputes, and documents that both parties willingly ended the contract. Without it, either side might still claim ongoing obligations.

When should you use a Mutual Rescission of Contract?

Use it when both parties decide not to proceed with a contract — whether due to changes in business needs, inability to perform, or mutual benefit in termination.

What should a Mutual Rescission include?

It should reference the original agreement, specify the effective termination date, outline any consideration exchanged, include a release of liability, and state applicable governing law.

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