Tuesday, 15 February 2022

Recission of contracts

 Recission of contracts by Kalyani

What is rescission of a contract?

In contract law, rescission has been defined as the unmaking of a contract between parties. Rescission is the unwinding of a transaction. This is done to bring the parties, as far as possible, back to the position in which they were before they entered into a contract (the status quo ante. Rescission is an equitable remedy and is discretionary. A court may decline to rescind a contract if one party has affirmed the contract by his action 1 or a third party has acquired some rights or there has been substantial performance in implementing the contract. Furthermore, because rescission is supposed to be imposed mutually upon both sides to a contract, the party seeking rescission normally must offer to give back all benefits he or she has received under the contract (an "offer of tender") The injured party may rescind the contract by giving notice to the representor. However, this is not always necessary as any act indicating repudiation, eg notifying the authorities, may suffice.(Car & Universal Finance v Caldwell) 2

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:

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

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

rescission is not a remedy for breach of contract

rescission can take effect by mutual agreement of the parties

rescission is barred in certain circumstances.

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