Which term refers to the right of a party to cancel a contract?

The term that refers to the right of a party to cancel a contract is known as rescission. Rescission allows one or both parties to terminate the contract and revert to their positions prior to entering the agreement. This can be executed in cases where there has been a breach of contract, misrepresentation, or if the contract was deemed voidable due to specific circumstances, such as undue influence or lack of capacity.

Understanding rescission is crucial, as it helps parties navigate their legal rights when a contract no longer serves its intended purpose or when it is entered into under false pretenses.

The other terms do not pertain to canceling a contract. Modification refers to changing the terms of an existing contract without voiding it. Ratification involves confirming and validating a previously signed agreement, showing that the party approves the contract as is. Assignment is the transfer of rights or obligations under a contract to a third party, which does not cancel the original contract but rather transfers responsibility.