Contracts
When both parties agree to terminate a real estate purchase contract and release each other from obligations, this is called:
ARescission by operation of law
BMutual release (or mutual rescission)✓ Correct
CLiquidated damages
DNovation
Explanation
A mutual release (mutual rescission) occurs when both buyer and seller agree in writing to cancel the purchase contract and release each other from all obligations. Earnest money disposition is typically specified in the release.
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