Contract Rescission Lawyers

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What Does Contract Rescission Mean?

Contract rescission refers to the termination or cancellation of a contract. It is sometimes called “cancellation” or “overturning”. The word rescission comes from the word “rescind” which means to cancel or annul. The purpose of contract rescission is to restore the parties to their original status before the contract was made (the “status quo ante”). 

Contracts must be rescinded entirely; that is, the entire contract must be cancelled, not just one part. If only a portion of the contract is to be cancelled, this is usually accomplished under contract reformation laws, not rescission laws. Rescission is often available as a remedy in cases where there are issues with the way that the contract was formed. 

Under What Circumstances Can a Contract Be Rescinded?

In order to rescind a contract, a judge must determine that there is a valid basis to cancel the contract. A contract creates a legal duty to act for both parties, and contracts cannot be rescinded simply because the parties have changed their mind. 

Contract rescission is available under the following circumstances:

When Is Rescission Not Available?

Rescission is an equitable remedy, meaning that it is discretionary or up to the judge’s decision. It is not an immediate right and is only available under certain circumstances. A judge can deny a request for rescission based on the following:

Finally, a judge can deny a request for rescission if the party has already requested for money damages. If the person is requesting contract rescission, they must file for it first- they will not be entitled to contract rescission after seeking money damages. 

In other words, a party cannot file for money damages and then change their mind and have the contract rescinded. On the other hand, if they have filed first for rescission, they are allowed to retract their request and then request for money damages instead.  

Do I Need a Lawyer for Contract Rescission? 

Whether it is you or another party requesting for contract rescission, it is advisable to contact a lawyer before you file a claim with the court. Contract rescission is a major decision and can often be complex and multi-layered. The effect of rescission is that the entire contract is cancelled out. An experienced business attorney will be able to tell you whether rescission is appropriate and what your chances are in succeeding with such a claim. Be sure to file for rescission first before requesting for money damages.

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Last Modified: 12-19-2014 05:11 PM PST

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