What term describes an agreement dissolving an agency relationship by mutual consent?

The term that describes an agreement dissolving an agency relationship by mutual consent is mutual rescission. This process entails both parties, typically the principal and the agent, coming together to agree that the agency relationship is no longer necessary or desired. It reflects a mutual decision to terminate the agreement, signaling that both parties acknowledge the end of their contractual obligations to one another.

In the context of agency law, mutual rescission is important because it allows for a clear, consensual conclusion of the agency relationship without any disputes or unilateral termination. This consensual approach helps avoid legal ramifications that could arise from a one-sided termination. While terms like agency termination and contract cancellation may imply the end of an agency, they do not specifically denote that both parties have agreed to that dissolution. Similarly, mutual dissolution could refer to surrendering an agreement but lacks the specific legal connotation associated with breaking agency relationships that mutual rescission holds.