The cancellation or destruction of a right, quite often because the time for enforcement has passed.
Example: waiting more than four years after the due date to make a demand for payment on a promissory note wipes out the person’s right to collect the money owed to him/her. It can also occur by fulfilling the obligation so no further money or performance is due.
Beware! Extinguishment is not the same as extinction, which refers to the death and disappearance of a species.