What does "by mutual agreement" refer to in terminating a contract?

"By mutual agreement" in the context of terminating a contract specifically refers to the situation in which both parties involved in the contract come together to make a joint decision to end their contractual obligations. This collaborative approach ensures that both parties acknowledge the termination and agree on the terms under which it occurs.

When two parties mutually agree to terminate a contract, it typically involves discussions about the reasons for termination and any potential consequences or settlements that might arise from this agreement. This kind of termination is generally seen as an amicable resolution to the relationship established by the contract.

Other options describe different scenarios. A unilateral termination, where one party ends the contract without the other's consent, does not fit the definition of mutual agreement. Termination by government action implies an external force influencing the contract's cessation, rather than the will of the parties involved. Lastly, satisfying a contract "as per its terms" means that the obligations have been fulfilled, thus concluding the contract, which is also different from mutual agreement to terminate.