Rescission
What does "Rescission" mean in law?
Rescission is an equitable remedy that unwinds a contract ab initio, treating it as though it never existed and restoring both parties to their pre-contractual positions. It is available when a contract was induced by fraud, mutual mistake, duress, undue influence, or material misrepresentation, or when one party has committed a material breach. Upon rescission, each party must return any benefits received under the contract, a requirement known as restitutio in integrum. Rescission may be effected by mutual agreement of the parties, by a unilateral declaration of the injured party (subject to judicial confirmation), or by court order. A party seeking rescission must act promptly upon discovering the grounds for avoidance, as undue delay may constitute ratification of the contract.
Definition
Rescission is an equitable remedy that unwinds a contract ab initio, treating it as though it never existed and restoring both parties to their pre-contractual positions. It is available when a contract was induced by fraud, mutual mistake, duress, undue influence, or material misrepresentation, or when one party has committed a material breach. Upon rescission, each party must return any benefits received under the contract, a requirement known as restitutio in integrum. Rescission may be effected by mutual agreement of the parties, by a unilateral declaration of the injured party (subject to judicial confirmation), or by court order. A party seeking rescission must act promptly upon discovering the grounds for avoidance, as undue delay may constitute ratification of the contract.
Example
After discovering that a car dealer had rolled back the odometer by 60,000 miles, the buyer obtained rescission of the sale, returned the car, and received a full refund of the purchase price.