When both parties agree that their contractual relationship should be terminated without performance and their obligations are discharged, this is:
A) rescission
B) novation
C) accord and satisfaction
D) discharge by operation of law
E) equitable remedy

Question

Quizplus · Accepted Answer

Rescission is the mutual agreement of the parties to terminate the contract and discharge all obligations. This is different from accord and satisfaction, where the parties agree to an alternative performance to discharge the original obligation. Novation involves the substitution of a new party or new obligation, not just the termination of the existing contract. Discharge by operation of law is when the law automatically terminates a contract, such as through impossibility or frustration. Equitable remedies are remedies ordered by a court to prevent injustice, but do not necessarily terminate the contract.

When Both Parties Agree That Their Contractual Relationship Should Be