Proprietary remedies following rescission and rectification

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

  • Proprietary remedies following rescission and rectification
  • What is rescission?
  • Proprietary remedies following rescission
  • The requirement to make counter restitution when rescinding
  • What is rectification?
  • Proprietary remedies following rectification
  • Practical considerations
  • Early considerations
  • Pleading the remedies sought

Proprietary remedies following rescission and rectification

This Practice Note considers the availability of proprietary remedies following rescission and rectification. Where a contract (or gift) has been rescinded or a contract has been rectified, this may leave one of the parties in the position where they have suffered some loss as a result of the rescission or rectification.

For example, where a contract is rescinded the aim is to put the parties back into the position that they would have been as if the contract had never been made and yet, prior to the rescission property may have transferred from one party to the other or another. It is in this way that a claim in restitution may be available to provide some form of remedy.

What is rescission?

Rescission is an equitable remedy which aims to put parties back in the position that they would have been in prior to a contract being made or a gift being extended.

Under the common law, rescission is only possible if it is possible to put the transferring party back in its original position, without resort to legal process. Under the common law, contracts may only be rescinded on the grounds of:

  1. fraudulent misrepresentation

  2. duress, or

  3. non-disclosure in the case of insurance contracts

There are fewer barriers to rescission in equity than under the common law.

Equity extends the right to rescind to:

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