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Rescission of Contract Business Law Definition

Rescission of Contract Business Law Definition: What You Need to Know

As a business owner, you know the importance of contracts. They protect your interests and ensure that both parties fulfill their obligations. However, even the most well-drafted contracts can sometimes result in disputes. In such cases, rescission of contract may be necessary. In this article, we’ll explain what rescission of contract means in business law and when it may be appropriate.

What is Rescission of Contract?

Rescission of contract is a legal remedy that allows you to unilaterally void a contract. In other words, it’s a way to cancel or terminate a contract that has already been executed. Rescission of contract is usually allowed in cases where there has been a material breach of the contract or fraud or misrepresentation by one of the parties.

When is Rescission of Contract Appropriate?

Rescission of contract may be appropriate in a variety of circumstances. For example, if one party made a material misrepresentation or failed to disclose important information, the other party may be entitled to rescind the contract. Similarly, if one party fails to fulfill its obligations under the contract, the other party may be entitled to rescind the contract.

Another scenario where rescission of contract may be appropriate is if the contract was entered into under duress or undue influence. For example, if one party was forced to sign the contract under threat of physical harm or other coercion, the contract may be rescinded.

How to Rescind a Contract

To rescind a contract, you typically need to give notice to the other party. The notice should specify the reasons for rescission and the date on which the rescission will take effect. You may also need to provide evidence to support your claim for rescission, such as documentation of the misrepresentation or breach of contract.

Once you have given notice of rescission, the other party may dispute your claim. If the dispute cannot be resolved through negotiation or mediation, the matter may need to be resolved through litigation.


Rescission of contract can be a powerful tool for resolving disputes and protecting your interests in business contracts. However, it’s important to understand the circumstances under which rescission is appropriate and to follow the proper procedures for rescinding a contract. If you’re considering rescinding a contract, it’s a good idea to consult with a lawyer who can advise you on your rights and options.