What is Rescission Of A Contract?

Legal Definition
The destruction or annulling of a contract.

2. The right to rescind a contract seems to suppose not that the contract has existed only in appearance; but that it has never had a real existence on account of the defects which accompanied it; or which prevented its actual execution. 7 Toul. n. 551 17 Id. n. 114.

3. A contract cannot, in general, be rescinded by one party unless both parties can be placed in the same situation, and can stand upon the same terms as existed when the contract was made. 5 East, 449; 15 Mass. 819; 5 Binn. 355; 3 Yeates, 6. The most obvious instance of this rule is, where one party by taking possession, &c., has received a partial benefit from the contract. Hunt v. Silk. 5 East, 449.

4. A contract cannot be rescinded in part. It would be unjust to destroy a contract in toto, when one of the parties has derived a partial benefit, by a performance of the agreement. In such case it seems to have been the practice formerly to allow the vendor to recover the stipulated price, and the vendee to recover, by a cross-action, damages for the breach of the contract. 7 East, 480, in the note. But according to the later and more convenient practice, the vendee, in such case, is allowed in an action for the price, to give evidence of the inferiority of the goods in reduction of damages, and the plaintiff who has broken his contract is not entitled to recover more than the value of the benefit the defendant has actually derived from the goods or labor; and when the latter has derived no benefit, the plaintiff cannot recover at all. Stark. on Evidence, part 4, tit. Goods sold and delivered; Chitty on Contr. 276.

5. A sale of land, by making a deed for the same, and receiving security for the purchase money, may be rescinded before the deed has been recorded, by the purchaser surrendering the property and, the deed to the buyer, and receiving from him the securities he had given; in Pennsylvania, these acts revest the title in the original owner. 4 Watts, 196, 199. But this appears contrary to the current of decisions in other states and in England. 4 Wend. 474; 2 John. 86; 5 Conn. 262; 4 Conn. 350; 4 N. H. Rep. 191; 9 Pick. 105; 2 H. Bl. 263, 264; Pre. in- Chan. 235; 6 East, 86; 4 B. & A. 672. See 7 East, 484; 1 Mass. R. 101 14 Mass. 282; Whart on's Dig. 119, 120 10 East, 564; 1 Campb. 78, 190; 3 Campb. 451; 3 Starkie, 32; 1 Stark. R. 108; 2 Taunt. 2; 2 New Rep. 136; 6 Moore, 114; 3 Chit. Com. L. 153; 1 Saund. 320, b. note; l Mason, 437; 1 Chip. R. 159; 2 Stark. Ev. 97, 280 8 lb. 1614, 1645 3 New Hamp. R. 455; 2 South, R. 780 Day's note to Templer v. McLachlan, 2 N. R. 141; 1 Mason, 93; 20 Johns. 196; 5 Com. Dig. 631, 636; and Com. Dig. Action upon the case upon Assumpsit, A 1, note x, .p. 829, for a very full note; Com. Dig. Biens, D 3, n. s.

6. As to the cases where a contract will be rescinded in equity on the ground of mistake, see Newl. Cont. 432; or where heirs are dealing with, their expectancies, lbid. 435; sailors with their prize money, Ibid. 443; children dealing with their parents, Ibid. 445; guardians with their wards, Ibid. 448; attorney with his client, Ibid. 453; cestui que trust, with trustee, Ibid. 459; where contracts are rescinded on account of the turpitude of their consideration, Ibid. 469; in fraud of marital rights, Ibid. 424 in fraud of marriage agreement, Ibid. 417 on account of imposition, Ibid. 351; in fraud of creditors, lb. 369; in fraud of purchasers, Ib. 391; in fraud of a deed of composition by creditors, lb. 409.
-- Bouviers Law Dictionary