When a contract is rescinded, it is
voided and the parties are returned to the positions that they were in prior to
entering the contract.
order to obtain a rescission of contract by the court, the plaintiff in the
case must plead and prove the following elements:
1. That the plaintiff entered into a
contract because of fraud, negligent misrepresentation, undue influence or
duress, or that there was a material breach of the contract by the defendant,
or that there was a mutual or unilateral mistake in contracting.
2. That the plaintiff returned the
consideration or was unconditionally willing to return the consideration to the
defendant, along with any benefits that the plaintiff received based on the
3. That the plaintiff acted promptly in
rescinding the contract and didn’t treat the contract as an ongoing obligation;
4. That the plaintiff notified the defendant
of the intention to rescind.
some cases, there may be no consideration for the plaintiff to return, or the
plaintiff may have some other claim that offsets the consideration. In these cases, the court may permit the
plaintiff to obtain a rescission of the contract without returning the
importance of acting promptly to rescind the contract cannot be
overstated. A plaintiff’s duty to act
arises when the plaintiff first becomes aware of the facts that give rise to
the right to rescind. The plaintiff must
give notice of intention to rescind within a reasonable period of time. The specific amount of time that is
reasonable will vary depending on the underlying facts. The court will decide what’s reasonable on a
a plaintiff continues to treat the contract as ongoing, such as by continuing
to receive and accept benefits under the contract, the court is likely to find
that the right to rescind has been waived.
A plaintiff can also affirmatively waive their right to rescind by
indicating to the defendant that they will continue to be bound by the
contract. A party who has chosen not to
rescind may still seek damages through other remedies, such as for breach of
contract or fraud.
experienced attorneys at Baldwin & Briscoe can assist you if you are a
party to a contract which should be rescinded. If you have questions about
the rescission of a contract, you may wish to contact Baldwin & Briscoe.
information contained on this page is provided as general information and does
not constitute legal advice. We’d be
happy to sit down with you and review your situation and provide appropriate
advice. Call today for your
The Law Offices of Baldwin & Briscoe, P.C. also offers these
Foreclosure, Business Law, Civil Litigation, Criminal Defense, Employment,
Disability, and Consumer Rights, Family Law, Government Contracts Law, Intellectual Property, Personal Injury, Real Estate, Social Security
Disability & Workers’ Compensation and Wills, Trusts, & Estates