Oregon 30-Hour Real Estate Law Practice Test

What action describes Sam and Gina's agreement to cancel the deal after the inspection?

1. Amending the contract

2. Mutually rescinding the contract

3. Withdrawing from the agreement

4. Transferring the contract

The correct answer is: Mutually rescinding the contract

The action of Sam and Gina agreeing to cancel the deal after the inspection is best described as mutually rescinding the contract. This term refers to both parties agreeing to terminate a contract and return to their original positions, essentially nullifying the agreement as if it never existed. Mutual rescission implies that both Sam and Gina have consented to end the contract, which aligns with their decision to cancel the deal following the inspection. In contrast, amending the contract would suggest making changes or modifications to the terms rather than entirely canceling it. Withdrawing from the agreement typically indicates that one party chooses to back out unilaterally, which does not fit the scenario where both parties have agreed to the cancellation. Transferring the contract involves assigning the rights and obligations of the contract to another party, which isn't relevant when both parties simply choose to void the agreement between themselves. Thus, the correct understanding of their action is contained in the concept of mutual rescission.