The only way to legally cancel a contract is through the agreement of the parties or through rescission of the contract. There are multiple ways to rescind a contract, including mistakes, fraud, duress, illegality, impossibility, public policy and other applicable state grounds for rescission that vary by state.
If the parties have made a mistake as to one of the material terms of the contract, you will be entitled to receive a declaration from a court that you do not have to perform or execute your duties under the contract.
Fraud and Duress
If you were tricked into signing the contract by fraud or coerced to sign the contract under duress, you may seek a declaration that you owe no performance under the terms of the agreement.
Impossibility and Illegality
If the terms of the contract are impossible to perform or the subject matter of the contract is illegal, you may also receive a favorable declaration as to your rights. Additionally, if you can convince a court that enforcement of the contract would be against public policy, you may have valid grounds for rescission.
Breach of Contract
If you fail to perform under a contract that you have signed, you may be held in breach of contract and ordered by a court to perform under the agreement or pay damages to the other party. Business contracts sometimes describe measures to be taken if one party breaches the contract.