Misrepresentation—rescission as a remedy — 2022
Published by a LexisNexis Dispute Resolution expert
Last updated on 12/08/2022

The following Dispute Resolution practice note provides comprehensive and up to date legal information covering:

  • Misrepresentation—rescission as a remedy
  • The remedy of rescission in misrepresentation claims
  • Bars to rescission—affirmation
  • Rule against partial rescission
  • Bars to rescission—impossibility of restoration (impossibility of restitution)
  • Where third parties have acquired rights
  • Discretion where equitable to award damages in lieu of rescission—Misrepresentation Act 1967, s 2(2)
  • When is delay a bar to rescission as a remedy for misrepresentation?
  • Can you contractually restrict the right to rescind as a remedy for misrepresentation?
  • Limitation issues when rescinding
  • More...

Misrepresentation—rescission as a remedy

This Practice Note sets out when and how an innocent party can rescind a contract for misrepresentation, why they would wish to do so and when rescission is not permissible.

For guidance on when a party may recover damages for a misrepresentation or seek to limit/exclude liability for misrepresentation, see Practice Notes:

  1. Misrepresentation—damages as a remedy

  2. Misrepresentations—excluding and limiting liability for them

The remedy of rescission in misrepresentation claims

A party who was induced to enter into a contract by a misrepresentation may elect to rescind the contract. If the rescission is challenged, that party may seek the assistance of the court to give effect to the rescission.

The effect of rescission, where available, is to put the parties back in the position they were in before the contract was made. It is sometimes referred to as rescission ab initio to distinguish it from termination or cancellation that does not nullify the contract, but brings it to an end.

Rescission is available as a remedy whether the misrepresentation was fraudulent, negligent or innocent, provided the statement made induced the representee to enter into the contract and it was false.

It is an equitable remedy granted in the court’s discretion. Importantly, the representee is not required to show that they suffered any loss.

Once the representee has become aware of the false statement that induced them to enter into the

Related documents:
Key definition:
Rescission definition
What does Rescission mean?

The right in equity to rescind is the right of a party to set aside a transaction and to be restored to their former position. It is a remedy for misrepresentation or for common/mutual mistake.

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