Also known as: agreements of rescission · rescission agreement
Written by attorneys · grounded in primary & secondary sources — see below
An agreement under which each party agrees to discharge all of the other party's remaining duties of performance under an existing contract. The agreement extinguishes those duties on both sides. Whether the parties also agree to make restitution for performance already rendered is a question of interpretation.
Andrew Avery and Azure Solutions signed a written consulting agreement for an eight-month policy report. Before any work began, their representatives met and verbally agreed to cancel the project entirely. Azure Solutions later refused to reimburse expenses, claiming the original contract required a writing to end. The oral agreement discharged all unperformed duties, so Azure Solutions had no remaining obligations under the written contract.
The City of Fairview contracted with GreenLoop Recycling for ten years of collection services. After contamination issues arose, the parties signed an interim cease service agreement stating that GreenLoop would stop collection immediately and that all further obligations under the recycling contract were terminated. Fairview later sued for resumed service and payments. The signed agreement formed an agreement of rescission that released both parties from any remaining duties.
Select any source to read its text and confirm it supports the definition.
Avalon Pharmaceuticals and Apex Dynamics entered a multi-season licensing deal. After two seasons underperformed, they signed a mutual content removal agreement canceling all remaining obligations regarding the series. StreamNow stopped payments for later seasons. The agreement discharged both parties' future duties, and the document's language did not require restitution for prior performance.
No. All unperformed duties under an enforceable contract may be discharged by an oral agreement of rescission even if the original contract had to be in writing. The statute of frauds applies only if the rescission itself transfers an interest in property.
Supporting sources
Each party's mutual promise to release the other from remaining duties supplies the consideration. No separate payment or new consideration from outside the transaction is required.
Supporting sources
No. The agreement discharges all remaining duties of performance. Whether the parties also agree to make restitution is a separate question of interpretation of their intent.
Supporting sources
Courts examine the language of any written agreement and the parties' post-agreement conduct. Explicit statements canceling all remaining obligations, combined with complete cessation of performance by both sides, support a finding of full rescission.
Supporting sources