Definition
A mutual release is a signed agreement where both of you agree to cancel the contract, releasing each other from all obligations. Usually the earnest money is returned.
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Find my pathAbout this term
A mutual release is a voluntary termination of the contract by both parties. When both parties agree to cancel without fault, they execute a mutual release form that voids the contract and returns earnest money to the buyer. This is a negotiated solution that avoids litigation and allows both parties to move forward. Mutual releases require clear documentation of the earnest money return and confirmation that all obligations are satisfied.
Pro Tip
Get a mutual release in writing if both parties agree to cancel.
Example
The buyer and seller signed a mutual release, allowing the buyer to withdraw and the seller to relist the property.