Rescission of Contract – a remedy to undo an unjust contract or to undo by mutual agreement


    Historically, commoners were often duped into signing deceptive contracts: “You should have read the fine print!” may have then been a legal argument against a partially-illiterate person who was then held unjustly “to the letter of the law” in court.

    Well, within law there are remedies for this very reason — to protect people.   Unfortunately, however, people have been hurt and abused by this sneaky way of “doing business,” which brings us to a type of remedy called a

rescission of contract:

“The unmaking of a contract by a court that deems it to be unfair and unjust.” [1]

n. (17c)

l. A party’s unilateral unmaking of a contract for a legally sufficient reasons such as the other party’s material breach, or a judgment rescinding the contract; VOIDANCE.  *  Rescission is generally available as a remedy or defense for a nondefaulting party and is accompanied by restitution of any partial performance, thus restoring the parties to their precontractual positions. – aka avoidance

2. An agreement by contracting parties to discharge all remaining duties of performance and terminate the contract. — Often misspelled either recision or recission. – aka (in sense 2) agreement of rescission; mutual rescission; abandonment.  rescissory, adj.” [1]

     Excerpt from John D. Calamari & Joseph M. Perillo’s The Law of Contracts:

     “The [UCC] takes cognizance of the fact that the term ‘rescission’ is often used by lawyers, courts and businessmen in many different senses; for example, termination of a contract by virtue of an option to terminate in the agreement, cancellation for breach and avoidance on the grounds of infancy or fraud. In the interests of clarity of thought -as the consequences of each of these forms of discharge may vary -the Commercial Code carefully distinguishes three circumstances. ‘Rescission’ is utilized as a term of art to refer to a mutual agreement to discharge contractual duties. ‘Termination’ refers to the discharge of duties by the exercise of a power granted by the agreement. ‘Cancellation’ refers to the putting an end to the contract by reason of a breach by the other party. Section 2-720, however, takes into account that the parties do not necessarily use these terms in this way.[3]

equitable rescission(1889) Rescission that is decreed by a court of equity.

express rescission – A straightforward, explicit agreement of the parties to a contract that it will no longer bind either of them.  *  The consideration for the promise of each party is the renunciation by the other of his rights under the contract.

legal rescission(1849) 1. Rescission that is effected by the agreement of the parties.  2. Rescission that is decreed by a court of law, as opposed to a court of equity[2]


[1]: Black’s Law Dictionary Second Edition Online, “RESCISSION OF CONTRACT”:

[2]: All other definitions from Black’s Law Dictionary Deluxe Tenth Edition by Henry Campbell Black & Editor in Chief Bryan A. Garner. ISBN: 978-0-314-62130-6

[3]: John D. Calamari & Joseph M. Perillo, The Law of Contracts 5 21-2, at 864-65 (3d ed. 1987). ,


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