RESCISSION

6 definitions found across Law Mind sources

RESCISSIONAuthored
The Law Mind • 1318 words • Verified
Definition
Rescission is the legal unmaking of a contract — its cancellation, annulment, or abrogation — with the effect of treating the agreement as though it never existed. The goal is restoration of the parties to their pre-contract positions, not compensation for breach. Rescission operates in two distinct contexts that researchers must keep carefully separated: 1. RESCISSION BY AGREEMENT (mutual rescission): Both parties consent to discharge the contract. The original agreement is undone by a new, express or implied agreement to abandon it. No party need establish a defect in the original contract; the consent of both is sufficient consideration for the mutual release. 2. RESCISSION FOR CAUSE (unilateral rescission): One party exercises a right — recognized at law or in equity — to void the contract on grounds such as fraud, material misrepresentation, mutual mistake, duress, undue influence, failure of consideration, or material breach by the other party. Rescission for cause is not simply a remedy for breach; it is a repudiation of the contract's validity or enforceability from the outset. A party who successfully rescinds is entitled to restitution of any benefit conferred, not expectation damages. The distinction between rescission and damages for breach is foundational: rescission looks backward to undo the transaction; damages look forward to compensate for its failure. ---
Common Language
Modern common usage (Wiktionary): "An act of rescinding: removing, taking away, or taking back. The undoing of a contract; repeal." Historical common usage (Webster's 1913): "The act of rescinding, abrogating, annulling, or vacating; as, the rescission of a law, decree, or judgment." The common usage is broader than the legal meaning in one important respect: ordinary language applies "rescission" freely to statutes, regulations, executive orders, and judgments — any formal act of undoing. In contract law, rescission carries a specific and consequential meaning tied to restoration of the parties, restitution obligations, and the election-of-remedies doctrine. A researcher encountering "rescission" in a non-contract legal context (a rescinded statute, a rescinded agency rule) should not assume the contract-law machinery of restitution and election applies. ---
Common Confusion
RESCISSION vs. TERMINATION: Termination ends a contract prospectively — obligations already performed are not disturbed. Rescission operates retroactively, treating the contract as void ab initio and triggering restitutionary obligations. The two are frequently conflated in transactional drafting, and courts have sometimes had to determine which remedy a party actually elected. RESCISSION vs. CANCELLATION: "Cancellation" is often used loosely as a synonym but most precisely refers to discharge for breach under the UCC, where the cancelling party retains a damages remedy. Rescission, by contrast, is traditionally inconsistent with a simultaneous claim for expectation damages — though modern courts have blurred this line. RESCISSION vs. AVOIDANCE: In civil-law and international commercial contexts (including CISG), "avoidance" is the preferred term for what common-law jurisdictions call rescission. Researchers working across legal systems should not assume terminological equivalence without analysis. ---
Core Elements
For rescission for cause to succeed, the following conditions generally apply: 1. GROUND FOR RESCISSION: A recognized basis must exist — fraud, misrepresentation, mistake, duress, undue influence, failure of consideration, or (in some formulations) material breach. 2. PROMPTNESS: The rescinding party must act with reasonable promptness upon discovering the ground. Delay may constitute ratification or waiver, extinguishing the right. 3. RESTORATION (RESTITUTION): The rescinding party must be prepared to return, or offer to return, any benefit received under the contract. A party who retains benefits while claiming rescission ordinarily cannot succeed. 4. ELECTION: Because rescission is inconsistent with affirmance, a party who sues for breach damages while continuing to perform may be held to have elected a remedy incompatible with rescission. ---
Why It Matters in Research
The word "rescission" is one of the most terminologically unstable terms in the Law Mind corpus. Three problems recur: First, historical sources — including the Black's entries in this dictionary — conflate rescission by agreement and rescission for cause without distinguishing their legal consequences. A 19th-century treatise stating that a contract "may be rescinded by either party" may be describing a contractual right to cancel, not equitable rescission for fraud. Context is essential. Second, the relationship between rescission and restitution evolved significantly across the late 19th and 20th centuries. Earlier materials treat rescission as almost purely equitable; later sources, particularly under Restatement influence, reframe it as a remedy available at law in many circumstances. Researchers using older encyclopedia entries or practice materials should check whether the restitutionary analysis they contain reflects modern doctrine or pre-Restatement equity. Third, insurance law applies rescission in a specialized and aggressive way: an insurer may rescind a policy ab initio upon proof of material misrepresentation in the application, leaving the insured without coverage even for losses that occurred before the rescission. This is doctrinally coherent but startling to researchers approaching from general contract materials. The insurance_6 encyclopedia entry addresses this directly and should be consulted before drawing on general rescission doctrine in an insurance research context. Fourth, the election-of-remedies trap is a live research hazard. Older cases frequently dismissed rescission claims because the plaintiff had previously demanded or accepted something inconsistent with treating the contract as void. Modern doctrine is more forgiving, but the older rule persists in many jurisdictions' case law and will appear in historical corpus materials without editorial flag. ---
Historical Dictionary Support
Black's (both editions) defines rescission consistently as cancellation, annulment, or abrogation by the parties or one of them — a formulation that covers both mutual and unilateral rescission without distinguishing them. The entry's reference to Spanish law's division between absolute and relative nullity is a notable comparative aside; it signals that 19th-century American lawyers understood rescission to sit in relationship to nullity doctrine, though the two are not identical in common-law analysis. The Spanish-law digression does not translate directly into U.S. doctrine and should not be imported as authority. Anderson's Dictionary fragment in the source material addresses a related but distinct problem: impossibility and destruction of the subject matter. This is best understood as a context in which rescission (or discharge) may arise by operation of law rather than election — the contract fails because performance has become impossible, and no party can enforce it or retain purchase money. Anderson's treatment reflects the common-law rule that risk of loss passes with ownership, and that a vendor who cannot deliver cannot retain payment. This is adjacent to rescission doctrine but is more precisely analyzed under impossibility or frustration. Neither historical dictionary entry engages the restitution obligation — the requirement that a rescinding party restore benefits received — which became increasingly central to 20th-century rescission analysis. Researchers relying on the historical sources for the mechanics of rescission will need to supplement with Restatement materials and modern equity treatises. ---
Jurisdictional Note
The availability of rescission as a remedy at law (versus exclusively in equity) varies by jurisdiction and affects whether a jury trial right attaches. Some states have substantially merged the legal and equitable rescission actions; others preserve the distinction. In federal court, the equitable/legal characterization has Seventh Amendment implications that do not disappear simply because a plaintiff labels the claim "rescission." ---
Encyclopedia Cross-Reference
contracts_67: Discharge — Mutual Rescission (The Law Mind Contracts & Commercial Law Encyclopedia) contracts_91: Remedies — Rescission and Restitution as Equitable Remedies (The Law Mind Contracts & Commercial Law Encyclopedia) insurance_6: Misrepresentation — Materiality, Reliance, and the Effect on Coverage (Rescission vs. Reformation) (The Law Mind Insurance Law Encyclopedia) ---
Related Terms
Restitution | Avoidance | Cancellation | Termination | Repudiation | Mutual Discharge | Reformation | Ratification | Election of Remedies | Void and Voidable Contracts | Misrepresentation | Fraud in the Inducement | Mistake (Mutual and Unilateral) | Failure of Consideration | Impossibility of Performance
RESCISSIONmain
Black's Law Dictionary • 1891
Rescission, or the act of rescinding, is where a contract is canceled, annulled, or abrogated by the parties, or one of them. In Spanish law, nullity is divided into absolute and relative. The former is that which arises from a law, whether civil or criminal, the princi- pal motive for which is the public interest; and the latter is that which affects only certain indi- viduals. "Nullity" is not to be confounded with "rescission." Nullity takes place when the act is affected by a radical vice, which prevents it from producing any effect; as where an act is in contra- vention of the laws or of good morals, or where it has been executed by a person who cannot be sup- posed to have any will, as a child under the age of seven years, or a madman, (un nino o demente.) Rescission is where an act, valid in appearance, nevertheless conceals a defect, which may make it null, if demanded by any of the parties; as, for example, mistake, force, fraud, deceit, want of sufficient age, etc. Nullity relates generally to public order, and cannot therefore be made good either by ratification or prescription; so that the tribunals ought, for this reason alone, to decide that the null act can have no effect, without stop- ping to inquire whether the parties to it have or have not received any injury. Rescission, on the contrary, may be made good by ratification or by the silence of the parties; and neither of the par- ties can demand it, unless he can prove that he has received some prejudice or sustained some damage by the act. 1 Cal. 281, citing Escriche.
RESCISSIONmain
Anderson's Dictionary of Law • 1890
parties contracted on the basis of the continued existence of the particular person or chattel.1 When property, real or personal, is destroyed by fire, the loss falls upon the party who is the owner at the time. If, from such destruction, the vendor of a house cannot perform his agreement to convey, he cannot recover or retain any part of the purchasemoney.2 The rule of the common law is the civil-law rule, that if one is employed in making up the materials or in adding his labor to the property of another, the risk is with the owner of the thing into which the labor is incorporated. One who, under a contract, is doing the ornamental woodwork in a building destroyed by fire while under control of the owner, may recover a quantum meruit for the work done prior to the fire. An accidental fire is not such act of God or vis major as will excuse the performance of a contract.s Where a res is seized by judicial process for debt, which carries with it a jus in re, as between debtor and creditor the maxim means that the destruction of the seized property, without fault of the debtor, works a payment of the debt to the extent of its value. Where third parties voluntarily join the seizing creditor in his proceeding, and unite, so to speak, in the seizure, also asserting claims which carry with them liens, the destruction of the property without fault of the debtor works a payment of their respective claims, to the extent of the value of the property destroyed, in the order of their priority.4 Where a vessel, before she breaks ground, is so injured by fire that the cost of repairs would exceed her value when repaired, and she is rendered incapable of earning freight, a contract of affreightment for the carriage of cotton, evidenced by a bill of lading providing for the payment of freight-money on the delivery of the cotton, is thereby dissolved, so that the shipper is not liable for any part of the money, nor for expenses paid for stowing the cotton. Ut res magis valeat quam pereat. That the thing may prevail rather than be destroyed: that the subject-matter may have effect, or the end be promoted, rather than be defeated. The courts aim to uphold, to preserve, not to destroy, written contracts, wills, statutes, all instruTaylor v. Caldwell, 113 E. C. L. *839 (1863), Blackburn, J.; Appleby v. Myers, L. R., 2 C. P. *658 (1867). 2 Wells v. Calnan, 107 Mass. 515-18 (1871), cases, Gray, J.; Snow v. Alley, 144 id. 551 (1887); Broom, Maxims, *238, cases. 3 Haynes v. Second Baptist Church, 12 Mo. Ap. 540-16 (1882), cases, Bakewell, J. Gill v. Packard, 4 Woods, 271 (1883), Billings, J.: 8. c. 17 F. R. 400. See also Viterbo v. Friedlander, 120 Cutting off; abrogating, canceling, annulling, nullifying, vacating, avoiding. Rescind. To annul a thing done; to vacate, set aside. Rescissory. Designed to abrogate, annul, avoid. Used, in particular, of the refusal of a party to a contract to be bound by it, because of alleged disability, mistake, or fraud operating at the time of the formal making; also, of the decree of a court of equity canceling a contract for cause shown. The right to rescind a contract of sale proceeds upon the ground that a party has been fraudulently betrayed into making the contract, and, having thus been induced to part with his own property, he may resume possession of it on returning that which he has himself received, thus placing the other party in the position he was in before the contract was made.4 Equity will rescind a purchase induced by a material misrepresentation of the vendor, though innocently made.5 The cancellation of an executed contract is an exertion of the most extraordinary power of a court of equity. The power ought not to be exercised in a clear case, and never for an alleged fraud, unless the fraud be made clearly to appear; never for alleged false representations, unless their falsity is certainly proved, and unless the complainant has been deceived and injured by them. The rule that he who seeks to rescind a contract of sale must first offer to return the property received, and place the other party in the position he formerly occupied, as far as practicable, prevails equally at the civil and the common law. It is a rule founded in natural justice, and requires that the offer shall be made by the purchaser to his vendor upon the discovery of the defect for which the rescission is asked. See 1 Bl. Com. 89; 2 id. 380; 95 U. S. 713; 106 id. 137; 108 id. 461; 109 id. 368; 59 Iowa, 325; 100 Mass. 113; 108 id. 393; 59 Miss. 96, 103; 89 N. C. 462; 92 N. Y. 345; Broom, Max. 565. 2 F. rescinder, to cancel: L. re-scindere, to cut off, annul. 3 Re-siz'-o-ry. 4 Snow v. Alley, 144 Mass. 551-57 (1887), cases, Devens, J. * Curtiss v. Hurd, 30 F. R. 733 (1887), cases. Atlantic Delaine Co. v. James, 94 U. S. 214 (1876), Strong, J.
Rescissionmain
Black's Law Dictionary (2nd Ed.) - Supplemental • 1910
Rescission, or the act of rescinding, is where a contract is canceled, annulled, or abrogated hy the parties, or one of them
RESCISSIONn.
Websters Unabridged Dictionary (1913) • 1913
The act of rescinding, abrogating, annulling, or vacating; as, the rescission of a law, decree, or judgment.
rescissionnoun
Wiktionary (English) • 2026
An act of rescinding: removing, taking away, or taking back. | The undoing of a contract; repeal.

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