When looking at the Encounters section of a patient, you have the ability to delete a "Draft" Encounter. Just click on the "trash can" on the right hand side of the encounter.
If the Encounter is already signed, it will need to be unlocked by a user with the appropriate settings on their account. Once it is unlocked, it can be deleted.
Once the encounter is unlocked, the Delete button will reappear in the top right corner of the encounter. You will also see how many times the encounter has been unlocked.