A property owner hires a contractor to build a deck for their home under a written contract. After the work begins, the property owner decides they no longer want the deck and both parties agree to cancel the contract. Which legal mechanism most accurately describes this agreement?
The correct answer is that the agreement to cancel the contract constitutes a rescission. Rescission occurs when both parties mutually agree to terminate a contract and discharge their duties under it. This differs from a substituted contract, where the original contract is replaced by a new one addressing the same subject matter, and from novation, which involves replacing one party in the contract with a new party. A release, by contrast, involves one party formally relinquishing the other party's obligations, but it does not necessarily require mutual agreement.
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What does rescission legally imply in contract law?
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What distinguishes rescission from other legal mechanisms like novation or release?
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What conditions can lead to the rescission of a contract?