Can parties release one another from a contract if circumstances change before a closing?

The correct answer is that parties can release one another from a contract if circumstances change before a closing through a legal procedure called rescission. Rescission is a formal legal process that allows for the cancellation of a contract, thereby setting aside the obligations of the parties involved as if the contract had never been made. This can occur when certain conditions are met, such as mutual agreement or specific reasons that make the contract untenable, such as fraud, misrepresentation, or a significant change in circumstances that impacts the contract's enforceability.

Understanding the context of rescission is important in real estate and mortgage transactions, as it provides a path for parties to legally disengage from an agreement that may no longer align with their intentions or circumstances. This ability to rescind is particularly relevant in situations where market conditions change significantly or if the financing terms become unfavorable.

The other options present viewpoints on contract enforceability that do not fully account for the legal provisions available to parties in a binding contract. While a signed contract is indeed typically considered binding, there are legal mechanisms, like rescission, that allow for the release of parties under certain conditions. Similarly, while mutual consent in writing can lead to a release, it does not specifically address the formal legal process that rescission