Last edited 27 Aug 2014

Rescission

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Rescission is the process of returning both parties to a contract to the position they would have been in had they not entered into a contract. If a contract is rescinded, it is treated as if it did not exist.

This might be appropriate for example if there has been a serious error in a contract or if one of the parties to the contract has made false representations.

However, circumstances often make it impossible to rescind a contract, for example where works have already been commenced, in which case damages may be awarded.

NB Where one party behaves in such a way that it indicates it no longer intends to accept its obligations under the contract, this is considered to be a repudiatory beach (or fundamental breach) allowing the innocent party to terminate the contract and to sue for damages. This is not rescission, as the parties are not returned to the position they would have been in had they not entered into the contract.

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