What differentiates a contract release from a rescission?

A contract release and a rescission serve distinct purposes in contract law, and understanding these differences is key to navigating contractual agreements.

A release is an agreement between the parties to a contract that terminates their obligations under that contract after it has been executed. This means that once the contract has been fulfilled to the extent agreed upon, the parties can mutually agree to release each other from any further obligations. Therefore, the option that states a release occurs after the contract is executed effectively captures the essence of what a release is.

On the other hand, rescission refers to the cancellation of the contract before it is fully executed. This often occurs when the parties agree to unwind the contract as if it never existed, usually due to issues like misrepresentation, fraud, or mutual mistake.

Mutual agreement is also an important aspect of rescission because it typically requires the consent of both parties; thus, while mutually agreeing to a rescission can be a part of the process, it does not fully define it. Furthermore, rescission is not limited to property transactions; it can apply to various types of contracts.

In essence, while the definition of a release encompasses the concept of obligations being concluded after a contract is executed, rescission relates to the annul