RESCISSION
rescission (ri-sizh-<<schwa>>n), n.1. A party’s unilateral unmaking of a contract for a legally
sufficient reason, such as the other party’s material breach, or a judgment rescinding the contract;
VOIDANCE. • Rescission is generally available as a remedy or defense for a nondefaulting party
and is accompanied by restitution of any partial performance, thus restoring the parties to their
precontractual positions. — Also termed avoidance. [Cases: Contracts 249. C.J.S. Contracts §§
422, 424, 427–428, 456, 465–466, 484.] 2. An agreement by contracting parties to discharge all
remaining duties of performance and terminate the contract. — Also spelled recision; recission. —
Also termed (in sense 2) agreement of rescission; mutual rescission; abandonment. Cf.
REJECTION(2); REPUDIATION (2); REVOCATION(1). [Cases: Contracts 252. C.J.S.
Contracts §§ 428, 462.] — rescissory (ri-sis-<<schwa>>-ree or ri-siz-), adj.
“The [UCC] takes cognizance of the fact that the term ‘rescission’ is often used by lawyers,
courts and businessmen in many different senses; for example, termination of a contract by virtue
of an option to terminate in the agreement, cancellation for breach and avoidance on the grounds
of infancy or fraud. In the interests of clarity of thought — as the consequences of each of these
forms of discharge may vary — the Commercial Code carefully distinguishes three circumstances.
‘Rescission’ is utilized as a term of art to refer to a mutual agreement to discharge contractual
duties. ‘Termination’ refers to the discharge of duties by the exercise of a power granted by the
agreement. ‘Cancellation’ refers to the putting an end to the contract by reason of a breach by the
other party. Section 2-720, however, takes into account that the parties do not necessarily use these
terms in this way.” John D. Calamari & Joseph M. Perillo, The Law of Contracts § 21-2, at
864–65 (3d ed. 1987).
equitable rescission.Rescission that is decreed by a court of equity. [Cases: Cancellation of
Instruments 1. C.J.S. Cancellation of Instruments; Rescission §§ 2–7.]
legal rescission. 1. Rescission that is effected by the agreement of the parties. [Cases:
Contracts 251.] 2. Rescission that is decreed by a court of law, as opposed to a court of equity.
“The modern tendency is to treat rescission as equitable, but rescission was often available at
law. If plaintiff had paid money, or had delivered goods, he could rescind by tendering whatever
he had received from defendant and suing at law to recover his money or replevy his goods. But if
he had delivered a promissory note or securities, or conveyed real estate, rescission required the
court to cancel the instruments or compel defendant to reconvey. This relief was available only in
equity. Many modern courts ignore the distinction …. But versions of the distinction are codified
in some states.” Douglas Laycock, Modern American Remedies 627–28 (3d ed. 2002). [Blacks Law 8th]