Contracts
Rescission
Cancelling a contract and returning both parties to their prior positions
Rescission unwinds rather than compensates: deposits come back, obligations end, and the parties are put back where they started. It may be by mutual agreement or ordered by a court where a party was induced to contract by fraud or misrepresentation.
How the exam asks about it
Distinguish from novation, which replaces a contract or a party, and from assignment, which transfers rights without ending anything.
Related terms
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