What is rescission of a contract?

Rescission of a contract is a legal procedure that revokes or cancels an agreement between two parties. This means that all parties to the contract will be restored to the same position or status they were in prior to the contract being formed. Depending on the statutes in Texas, a contract can be rescinded due to mutual agreement, mistake, fraud, misrepresentation, illegality, or impossibility of performance. Under Texas law, rescission is a remedy of last resort and must be based on facts showing that a party did not freely and voluntarily enter the contract. If rescission is granted, the parties must return any items received under the contract. For example, if a buyer purchases a car without being aware that the seller was not the legal owner, the buyer can request the car be returned to them and the contract revoked. Rescission must be requested by one of the parties involved in the contract. A court may order rescission on its own initiative, but this is rare. Rescission of a contract may be accomplished by executing a written rescission agreement and having both parties sign it, or by having a court enter a rescission order. It is important to keep in mind that rescission of a contract is not available in every situation and it is best to consult a lawyer before taking any action to rescind a contract.

Related FAQs

What is a contract of sale?
What is a contract of indemnification?
What is a declaratory judgment?
What is a material breach of contract?
What are the defenses to a breach of contract?
What is a contract of service?
What is anticipatory repudiation?
What is the effect of a modification of a contract?
What is the Statute of Limitations?
What is a discharge of contract?

What is rescission of a contract?

Related FAQs

Related Blog Posts