Friday, June 19, 2015

Cancellation or Rescission

Cancellation or rescission generally refers to a process by which a court terminates or cancels a contract or other instrument. Cancellation and rescission is distinguished from reformation, which is a generally a relief by a court to modify an agreement to express the true agreement or intentions of the parties.

The remedy of rescission is an ancient remedy provided by court of equity. The prime objective is to undo the transaction and restore the parties to their former status. The right of cancellation or rescission is not available as a matter of right, but lies within the strict discretion of the court in accordance with what is reasonable and proper under the circumstances of the particular case.

The grounds for a cancellation or rescission are often fraud, accident, or mistake. Types of fraud include fraudulent deception, concealment, or false representation. Duress and undue influence may also be the basis for cancellation or rescission. Duress may include moral compulsion, threats, or actual violence.