Also known as: rescission · rescind · rescinds · rescinded · rescinding · rescission remedy
Written by attorneys · grounded in primary & secondary sources — see below
An equitable remedy by which a court cancels a contract or other transaction and restores the parties to their pre-agreement positions when grounds such as fraud, mistake, unmarketable title, or breach of fiduciary duty exist. The term also encompasses contractual rescission by agreement and statutory rescission mechanisms. The remedy discharges remaining duties and may require restitution of benefits conferred. It is available only when the parties can be returned to the status quo without undue prejudice to third parties.
Rajesh Rao contracted to buy a parcel from Ronald Reed. A recorded lien remained unsatisfied at closing. Rao refused to proceed and sued for rescission. The court granted the remedy because the lien rendered title unmarketable and Reed could not cure before closing.
Renata Russo and Roberto Reyes entered a written services agreement subject to the statute of frauds. Before either performed, they orally agreed to cancel the deal entirely. When Russo later sought enforcement, the court held the oral rescission discharged all remaining duties despite the statute.
Select any source to read its text and confirm it supports the definition.
Ruby Rivera’s will contained a no-contest clause that rescinded any gift to a beneficiary who challenged its validity. Roger Ramirez filed a probate contest without probable cause. The court enforced the clause and rescinded Ramirez’s bequest.
Rajesh Rao signed an acknowledgment of parentage for a child born to Ruby Rivera. Within the statutory window Rao filed to rescind the acknowledgment under the uniform act. The court permitted rescission because the filing met the procedural requirements of section 308.
Ronald Reed, acting as agent for Rocky Mountain Mining, negotiated a supply contract. Reed later exercised the principal’s authority to rescind the agreement when market conditions changed. The counterparty could not enforce the original terms because the rescission fell within the granted powers.
Roberto Reyes, a promoter, sold property to the corporation he was forming without disclosing his profit to all contemplated investors. After formation the corporation sued to rescind the sale. The court granted rescission because Reyes failed to make full disclosure to every initial shareholder.
A buyer may rescind when title defects such as unreleased liens or breaks in the chain render title unmarketable and the seller cannot cure by closing. The remedy restores the buyer to the pre-contract position without requiring acceptance of defective title.
Yes. An oral agreement of rescission discharges all unperformed duties under an enforceable contract notwithstanding the statute of frauds. The statute applies only if the rescission itself transfers property.
A rescission agreement discharges all remaining duties of performance for both parties. It may also require restitution of benefits already conferred depending on the parties’ intent.
The clause is enforceable and rescinds the gift unless the challenger had probable cause to institute the proceeding. Courts apply the clause to deter baseless contests while protecting legitimate inquiries.