What is rescission of a contract?

Rescission of a contract is an equitable remedy in contract law in which the parties to the contract are returned to the position they were in prior to signing the contract. It essentially renders the contract null and void. Rescission is available when a contract is voidable, such as when one of the parties to the contract has been misled by the other. This remedy is usually sought in court by one of the parties. In South Carolina, rescission may be granted in certain situations. Rescission of a contract may be requested when a contract was signed under duress, or when it contains material misrepresentations or false promises. Additionally, in cases of fraud or mistake of a party, rescission may be available. Rescission of a contract is used as an equitable measure to restore a party to their original position, and to prevent one party from taking unfair advantage of another. In a rescission, all of the parties are relieved from their obligations under the contract. This is different from a breach of contract, in that a breach of contract does not terminate the contract, necessarily, but instead allows the injured party to seek compensation for the breach. Thus, rescission is a way to completely undo a contract, while a breach of contract is a way to only partially remedy the problem.

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