Contracts can be terminated by all parties to the contract upon agreement. The rights of the parties to terminate the contract may be defined in the contract agreement or by law.
Rescission of Contract
According to "Black's Law Dictionary," the rescission of a contract is the termination and discharge of remaining contractual duties not yet performed by the contracting parties. This is known as legal rescission as opposed to equitable rescission which is the termination of the contract by the court.
Upon the mutual agreement of the parties to rescind the contract and terminate any other duties and obligations, the parties must pay any money owed for the performance already completed prior to the termination of the contract.
Laws of rescission in your state may vary from laws of another state. Additionally, your rights and duties in the rescission of a contract may differ depending on the subject matter of the contract you wish to terminate.