What is the term for the option to nullify a contract?

The correct term for the option to nullify a contract is "Disaffirmance." Disaffirmance refers to the legal right of a party to void or cancel a contract, usually based on specific circumstances, such as the age of the parties involved (e.g., minors) or if there are issues regarding capacity or consent.

When a party exercises disaffirmance, they are essentially stating that they do not wish to be bound by the terms of the contract. This is particularly relevant in cases where a party might lack the legal capacity to enter into a contract or when a party wishes to retract from an agreement due to misrepresentation or other factors.

The other terms in the choices serve different legal functions. Ratification refers to the act of confirming or adopting a contract that was initially voidable. Rescission implies that a contract is canceled and both parties are returned to their pre-contractual positions, but this is generally the result of mutual agreement or legal grounds. Restitution involves the restoration of any benefit wrongfully received, which may occur as part of a remedy following a breach of contract but is not synonymous with nullifying a contract.