The correct answer to the question is:
D. Mutual rescission
Explanation:
1. Mutual rescission occurs when all parties involved in a contract agree to cancel the contract and return the original consideration as if the contract never existed.
2. This process discharges the contract, meaning it no longer holds any legal effect, and both parties are released from their obligations under the contract.
3. It is a voluntary agreement between the parties to undo the contract's terms and restore the original positions they were in before entering into the contract.
4. Mutual rescission requires the consent of all parties involved in the contract for it to be valid.
In summary, mutual rescission is the process of canceling a contract by agreement of all parties involved, returning the original consideration, and treating the contract as if it never existed.
