When two parties sign a contract, they are legally bound to fulfill all the terms and conditions mentioned in it. However, in some cases, one of the parties may wish to terminate the agreement due to various reasons. This termination of the contract is known as rescission.

What is rescission of contract?

Rescission of contract refers to the cancellation or termination of an existing agreement between two parties. It could happen due to a breach of contract, fraud, misrepresentation, duress, undue influence, mistake, or impossibility of performance.

When a rescission of contract occurs, it invalidates the agreement and renders the contract void. Both parties are released from their obligations under the original agreement, and any consideration paid or received is generally returned.

Why rescind a contract?

There can be several reasons why a party may opt for a rescission of the contract. Here are some of the most common scenarios:

1. Breach of contract: If one of the parties fails to fulfill their obligations under the contract, the other party can rescind the agreement.

2. Fraud or misrepresentation: In cases where one party was induced into signing the contract under fraudulent or misleading circumstances, they may seek rescission.

3. Duress or undue influence: If one party was forced or coerced into signing the agreement, they may seek to rescind the contract.

4. Mutual mistake: If both parties were mistaken about the terms of the contract, they may mutually agree to rescind it.

5. Impossibility of performance: If it becomes impossible to fulfill the obligations outlined in the contract, one or both parties may seek to rescind the agreement.

How to rescind a contract?

A rescission of contract requires specific procedures to be followed to ensure it`s legally binding. The party seeking to rescind must provide notice of their intent to terminate the agreement to the other party. They must also return any consideration received to the other party.

In some cases, a court may be required to enforce a rescission of contract. A party must seek legal advice to determine the appropriate steps to take to ensure a valid rescission.


Rescission of contract is a legal remedy available to parties when an agreement is no longer feasible or desirable. It ensures that both parties are released from their obligations under the original agreement, and any consideration paid or received is returned. Proper procedures and legal advice are necessary to ensure that a rescission of contract is valid and legally binding.