What is a rescission of a contract?

A rescission of a contract in Arizona is the process of legally undoing or canceling a contract. This can be done by a mutual agreement between both parties involved in the contract or through a court order. In some cases, one party may unilaterally rescind a contract if the other party has breached the agreement. A rescission of a contract is not to be confused with a contract termination, which ends the performance of the contract but doesn’t void or cancel it. When a contract is rescinded, it is as if the contract never existed. To rescind a contract in Arizona, both parties must sign an agreement terminating it. This agreement must include both parties’ willingness to rescind the contract and the date when the rescission will go into effect. The agreement must also specify the reason(s) for the rescission. After the agreement is signed, both parties must go through the process of unwinding the contract. This includes returning any property that either party was given and reimbursing any payments made. Finally, any terms of the contract that were not already performed must also be undone. Once the agreement is signed and all parties have completed the process of unwinding the contract, the rescission is complete and the contract is effectively void.

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