What legal operation involves the cancellation of a contract by mutual agreement?

The process of canceling a contract by mutual agreement is known as rescission. Rescission is a legal remedy that effectively voids the contract, returning both parties to their positions before the contract was made. This mutual agreement is essential, as both parties involved must agree to the cancellation for rescission to occur.

Understanding rescission is critical, particularly in real estate transactions, where parties may recognize that continuing with the original contract is no longer beneficial or feasible. It emphasizes the importance of clear communication and consent between parties in contractual relationships. The other terms, while related to contracts, do not involve the mutual agreement aspect in the same way. Revocation refers to the unilateral withdrawal of an offer, termination can refer to ending a contract under certain conditions, and amendment involves changing specific terms of the contract rather than canceling it outright.