This mutual rescission and release agreement is between , an individuala(n) (the "") and  , an individual a(n) (the "").

The parties entered an agreement dated (the "Agreement"), a copy of which is attached as Exhibit A.

Neither party has completed its duties or performed any material tasks under the Agreement.

The parties have decided mutually to rescind the Agreement as of the rescission date in this agreement.


The Agreement is hereby unconditionally rescinded ab initio and each party to the Agreement will be restored to the position it was in immediately before the Agreement was executed.


Effective as of the rescission date, each party hereby releases and forever discharges the other party from all actions, causes of action, suits, debts, obligations, claims, liabilities, and demands whatsoever that it has or may have under the terms of the Agreement. 


Each party has an ongoing duty to treat the other party's confidential information as confidential, and agrees that it will not disclose such information to any third party or use it for any purpose other than to fulfill an outstanding obligation under the Agreement or this rescission. Each party also agrees that it will use due care and diligence to prevent any unauthorized use or disclosure of such information.


Each party agrees not to engage in any form of conduct, or make any statements or representations, that disparage or otherwise harm the other party's reputation, goodwill, or commercial interests.


Each party hereby covenants to the other party that with respect to any claim or obligation released by this rescission, it will not directly or indirectly encourage, solicit, or voluntarily assist or participate in any way in the filing, reporting, or prosecution by itself or any third party of a suit, arbitration, mediation, or claim (including a third-party or derivative claim) against the other party relating to any such released claim or obligation.


Unless otherwise specified in the Agreement, this rescission is to be construed according to the laws of the state of .


Each party represents and warrants that it has not assigned, transferred or purported to assign or transfer, voluntarily or involuntarily, or by operation of law, any matters released pursuant to this rescission (or any part of it) or any interest in the Agreement.


  • (a) Counterparts. The parties may execute this rescission in any number of counterparts, each of which is an original but all of which constitute one and the same instrument.
  • (b) Electronic Signatures. This rescission, agreements ancillary to this rescission, and related documents entered into in connection with this rescission are signed when a party's signature is delivered by facsimile, email, or other electronic medium. These signatures must be treated in all respects as having the same force and effect as original signatures.


If any provision contained in this rescission is, for any reason, held to be invalid, illegal, or unenforceable in any respect, that invalidity, illegality, or unenforceability will not affect any other provisions of this rescission, but this rescission will be construed as if the invalid, illegal, or unenforceable provisions had never been contained in it, unless the deletion of those provisions would result in such a material change so as to cause completion of the transactions contemplated by this rescission to be unreasonable.


No waiver of a breach, failure of any condition, or any right or remedy contained in or granted by the provisions of this rescission will be effective unless it is in writing and signed by the party waiving the breach, failure, right, or remedy. No waiver of any breach, failure, right, or remedy will be deemed a waiver of any other breach, failure, right, or remedy, whether or not similar, and no waiver will constitute a continuing waiver, unless the writing so specifies.


This rescission, together with the Agreement, constitutes the final agreement of the parties. It is the complete and exclusive expression of the parties' agreement with respect to its subject matter. All prior and contemporaneous communications, negotiations, and agreements between the parties relating to the subject matter of this rescission are expressly merged into and superseded by this rescission. The provisions of this rescission may not be explained, supplemented, or qualified by evidence of trade usage or a prior course of dealings. Neither party was induced to enter this rescission by, and neither party is relying on, any statement, representation, warranty, or agreement of the other party except those set forth expressly in this rescission. Except as set forth expressly in this rescission, there are no conditions precedent to this rescission's effectiveness.


The descriptive headings of the sections and subsections of this rescission are for convenience only, and do not affect this rescission's construction or interpretation.


This rescission will become effective when all parties have signed it. The date this rescission is signed by the last party to sign it (as indicated by the date associated with that party's signature) will be deemed the date of this rescission.


Each party shall use all reasonable efforts to take, or cause to be taken, all actions necessary or desirable to consummate and make effective the transactions this rescission contemplates or to evidence or carry out the intent and purposes of this rescission.


Each party is signing this rescission on the date stated opposite that party's signature.




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Mutual rescission and release agreement: How-to guide

When two parties want to invalidate an agreement and mutually agree to release the other from further obligations under that contract, they can use a mutual rescission to meet their objectives.

A rescission and release is the definitive end of the parties’ commitments under an agreement. If well-drafted, it can help prevent future disputes and save business relationships. A rescission agreement turns the clock back and puts each party in the position they were in before the agreement became effective. 

Key elements of a mutual rescission agreement

The following instructions will help you understand the terms of your mutual rescission and release agreement. Please review the document in its entirety before starting the step-by-step process. 


This section identifies the document as the rescission of an existing agreement. Herein, add the parties’ names and the date you want the rescission to be effective. The parties entered must be the same as those who signed the original agreement unless the new signers are personal representatives of the company that initially signed. This section must also contain the parties' certified or registered mail address.


This section talks about the rescission of the original contract and explains that the parties acknowledge the need to void the agreement. Put in the original contract’s effective date. A signed copy of the original agreement and other related documents must be attached hereto as the current agreement.


This section explains that the respective parties agree to rescind the agreement and be returned to the respective positions they were in before it was signed. Any further rights specified in the original contract will be deemed null. 

Mutual release of liability

This section eliminates the future rights to claim that either party still owes something under the original agreement. The parties release and forever discharge all liabilities that could arise from the original agreement. In other words, due to the mutual covenants of the parties, one party can’t sue the other for any unfinished duties or fees. 

Confidential information

This section reminds the parties that confidential information must remain confidential in full force, even after the rescission date. Review this section closely to ensure it provides sufficient security for your company and its proprietary information. 

Covenant not to sue

This section guarantees that neither party will have legal obligations thereunder based on claims released explicitly by the rescission. 

No assignment

This section verifies whether either party has transferred or promised to transfer any rights or obligations under the existing contract. 

Governing law

Review the original contract prior to signing this, as it probably includes a choice-of-law provision that selects the laws that will be used to interpret its terms. If it does not, this section allows you to choose those laws. 


This section protects the rescission terms as a whole, even if one part is later invalidated. For example, if a state law is passed prohibiting choice-of-law clauses, it will not undo the entire document. Instead, only the section dealing with the choice of law would be invalidated, and the other provisions of the rescission enforceable.

Counterparts; electronic signatures

This section mentions that even if the parties hereto sign the rescission in different locations or use electronic devices for signatures, all the separate pieces will be considered part of the same document. In a modern world, this provision ensures that business can be transacted efficiently without giving up the validity of the rescission.

Entire agreement

The parties’ agreement that the release agreement, mutual rescission of the contract they’re signing (when taken together with the original agreement) is “the agreement” about the issues involved. 


This section verifies whether the parties taken into consideration have the right and power to sign the agreement.


This part clarifies that the headings at the beginning of each section are meant to organize the document and should not be considered operational parts of the agreement.

Frequently asked questions

What's a mutual release agreement?

Sometimes, for any number of reasons, the terms of a contract go unfulfilled. Sometimes, it is in both parties’ interest to invalidate it rather than have it linger or be forgotten until there is a problem or dispute. That is when you need a mutual rescission of the contract and release agreements to annul the contract and officially move on with your business.

Which information is needed in a mutual rescission agreement?

Here's the information you'll need to have handy to complete your mutual rescission and release agreement:

  • Who it's coming from: Determine if a business or individual is sending the document and have the name and contact information ready
  • Who it's going to: Know who this document is going to and have the individual or business name and contact information ready. If it's a business, know the business type (LLC, corporation, etc.)
  • Which state will govern it: Specify a state so it's clear what laws apply to the document
  • Agreement details: Decide if any confidentiality provisions obligate both parties and if they agree to keep this matter private
  • Date: Know the effective date of the original agreement
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