When both parties mutually agree to terminate a contract, this is referred to as:

The correct answer is rescission, which is a legal term used to describe the cancellation or annulment of a contract by mutual consent of both parties involved. This process effectively returns the parties to their original positions before the contract was executed, as if the contract had never existed. Rescission can occur for various reasons, including mutual agreement due to changed circumstances, misrepresentation, or simply a realization that the contract no longer serves the interests of either party.

In contrast, the other terms do not apply to the mutual termination of a contract. Adhesion typically refers to contracts that are drafted by one party and accepted by another with little or no negotiation—this does not imply a termination of the contract. Abandonment refers to the act of one party giving up their rights to a contract or property, usually unilaterally rather than by mutual agreement. The transfer of rights involves one party assigning their contractual obligations or benefits to another, which also does not align with the mutual termination of an agreement. Thus, rescission is the appropriate term for the scenario described in the question.