Contracts
What is 'mutual rescission' of a real estate contract in Illinois?
AA court order cancelling a real estate contract
BThe voluntary agreement of both buyer and seller to cancel the contract and return to their pre-contract positions✓ Correct
CThe buyer's unilateral right to cancel within 3 days of signing
DRescission required when a contingency is not met
Explanation
Mutual rescission occurs when both parties to a contract agree to cancel it and return to the status quo—returning earnest money to the buyer and releasing all obligations. This requires agreement from both parties and is documented in a written rescission agreement. It differs from a buyer exercising a contingency (which is typically a one-sided right) and from a breach (where one party fails to perform). Mutual rescission requires the cooperation of both parties.
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