Super Toolmakers, Inc., contracts to sell its business to True Hardware Corporation. Before either party has performed, rescission of this contract requires

Question

Quizplus · Accepted Answer

Rescission is the cancellation of a contract, and it generally requires a mutual agreement to rescind. Since neither party has performed yet, consideration has not yet been exchanged, and performance by all parties has not yet occurred. Super's payment of damages would only be necessary if the contract was breached, which is not the case here. Therefore, the correct answer is A - a mutual agreement to rescind is required for rescission of this contract.