When are contracts rescinded?

On Behalf of | Jul 30, 2021 | Business Law

The usual remedies that a Florida court grants when someone breaches a contract are monetary damages or specific performance. In some circumstances, the court will allow for a party to rescind the contract.

Rescission voids the whole contract

Rescission essentially treats the contract as if it were never signed in the first place. Each party is excused from their end of the bargain. For example, if you bought a house and the seller did not disclose certain details, rescission may be an option if you do not choose to seek monetary compensation.

What leads to rescission

In business law, factors like mistakes and misrepresentation can lead to contract rescission. For example, if two parties believe that they have contracted about something completely different, they have made a mutual mistake. In that case, there is no point in going through with the contract.

Equitable doctrine

The court can order that a contract be voided when it feels that money may not be sufficient to undo the damage. This is an equitable remedy to help one party who has been the victim of misconduct by the other. In some cases, it would be grossly unfair to hold one party to the terms of the contract, so the court will void it.

Do not do this on your own

Rescission should never be mistaken with anticipatory repudiation, and this is not something that you can do on your own. If you do, you may be in trouble yourself for breach of contract. Rescission is only something that you are granted after you file a lawsuit unless the other side specifically gives you the ability to void the agreement.