Explain in Detail Rescission of Contract

Explain in Detail Rescission of Contract

Rescission of contract is the process of terminating a legally binding agreement. This is a complex legal concept that can be difficult to understand. In this article, we will explain in detail what rescission of contract is, when it can be used, and how it can affect parties involved in a contract.

What is Rescission of Contract?

Rescission of contract refers to the process of terminating a contract due to a breach of contract or other legal reasons. This means that the contract is cancelled and its terms are no longer enforceable.

When Can Rescission of Contract be Used?

There are various grounds for rescission of contract. These include:

1. Misrepresentation: If one party to the contract has made a false statement that has induced the other party to enter the contract, the contract may be rescinded. The false statement must be material to the contract and must have been made knowingly or recklessly.

2. Duress: If one party coerces the other party into entering the contract, through threats, intimidation or other means, the contract may be rescinded.

3. Undue Influence: If one party uses their power or position to exert undue influence on the other party to enter the contract, the contract may be rescinded.

4. Breach of Contract: If one party breaches the terms of the contract, the other party may be entitled to rescind the contract.

How Does Rescission of Contract Affect Parties Involved?

When a contract is rescinded, both parties are released from their obligations under the contract. Any benefits received under the contract must be returned, and any losses incurred must be compensated. If there is no agreement on the compensation, the court may determine what is reasonable.

In some cases, rescission of contract may result in damages or penalties. For example, the party who has breached the contract may be required to pay compensation to the other party.


Rescission of contract is a serious legal process that can have significant consequences for parties involved. It is important to understand the legal grounds for rescission of contract and the impact it can have on the parties. If you are considering rescinding a contract, it is advisable to seek the advice of a qualified legal professional.

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