Rescission of a contract
Rescission of a contract

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

  • Rescission of a contract
  • What is rescission of a contract?
  • What is the effect of rescinding a contract?
  • Rescinding a contract distinguished from terminating it for breach
  • Difference between a rescinded contract and a void contract
  • Rescission under the common law, equity and statute
  • Rescission at common law
  • Rescission in equity
  • Rescission under statute
  • Main grounds of rescission
  • More...

What is rescission of a contract?

The remedy of rescission is available to a party whose consent, in entering into a contract, has been invalidated in some way:

  1. the effect of rescinding a contract is to extinguish it and restore the parties to their pre-contractual positions

  2. the main grounds of rescission are misrepresentation, undue influence and duress

  3. rescission is not a remedy for breach of contract

  4. rescission can take effect by mutual agreement of the parties

  5. rescission is barred in certain circumstances

What is the effect of rescinding a contract?

Rescission is retrospective in effect:

  1. it cancels the contract from the beginning so that it is treated as never having existed

  2. the rights and duties of the parties under the contract are retrospectively extinguished

  3. each party must (so far as possible) restore to the other any benefits received under the contract

The purpose of rescission is to restore the status quo ante, ie the state of affairs existing before the contract was entered into. When a contract transferring title to property is rescinded, it usually has the effect of re-vesting any property so transferred in the transferor.

Rescinding a contract distinguished from terminating it for breach

It is important to distinguish the remedy of rescission from the remedy of termination for breach of contract, which historically was sometimes also called rescission (or ‘rescission de futuro’). In this context, ‘rescission’ was

Related documents:

Popular documents