What is rescission of a contract?

Rescission of a contract is a legal term that refers to the process of undoing or canceling a contract and returning the parties to a pre-contractual status. In Washington state, rescission of a contract must occur voluntarily, and with the agreement of both parties. For example, if a buyer and seller enter into a contract for the sale of a house, but the buyer has second thoughts, they can mutually agree to terminate the contract and the parties can then go their separate ways. When it comes to rescission of a contract, Washington state law requires that the parties must be able to fully restore the other party to their original state. For example, if a buyer returned the goods that were the subject of a contract and received a refund of the purchase price, the buyer must be able to reverse any damage caused by their possession of the goods. This includes any physical damage, as well as any benefits they gained from the goods. It is important to note that rescission of a contract is not the same thing as breach of contract. Breach of contract occurs when one party fails to meet the obligations of the contract and the other party has the right to seek legal remedies. Rescission of a contract requires the mutual agreement of both parties and is a way to avoid potential liabilities associated with a breach of contract.

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