When a valid legal contract is in dispute, injured parties will often seek remedies. Typically, these remedies will be legal or equitable in nature and can come in various forms. Though there are various ways rescission may provide remedy, the common goal is to cancel the prior agreement.
More importantly, remedies where rescission is mandated will try to restore the relevant parties of the contract to the positions held when they first entered into the contract. Essentially, these forms of relief try to nullify the contract and relieve the parties from the obligations and duties outlined.
Different Forms of Remedies: Legal, Equitable, & Injunctive
One form of rescission is a legal remedy that is considered rigid and clear-cut. The recuperation of monetary (money) damages is a great example where the injured party may stake a legal claim for money lost as a result of the contract. The amount of relief is clear and inflexible—dollar amounts.
Another form of rescission is an equitable remedy that is perceived as more flexible. The main goal of equitable remedies is to establish fairness amongst parties. Relief may not necessarily amount to a certain dollar amount owed to the victims.
Lastly, an injunctive relief is different in that relief comes from a court mandating/refraining another party from doing something. The different types of relief available highlights the importance of consulting your lawyer before proceeding with a claim. The right legal counsel will take your case into consideration and advise the best form of remedy for your personal situation.
Different Grounds for Rescission: Mistaken Fact or Law
When both parties mistake a crucial fact or law, the original contract may end up getting rescinded. For these cases, the mistaken fact or law must be material to the contract. By “material”, it means the fact was a vital part of the case that influences the outcome.
Take for example the sale of a classic automobile where the value and final sale price skyrocketed because the listing advertised that Michael Jackson once owned the car. If that past ownership was actually not truthful and both parties did not know, this sale would be considered a mutual mistake. Additionally, the mistaken fact was material to the contract because of the influence it had on the final sale price.
Fraud is actually the most common reason injured parties seek rescission. For legal purposes, fraud is defined as any action—or inaction—that is intended to deceive another party. These actions result in injury for the victim who relies on the contract.
There are different forms of fraud: intentional misrepresentation, negligent misrepresentation, concealment of material fact, and failure to disclose material fact. If you are unclear or actively dealing with a contract dispute that involves fraud, legal counsel is highly advised.
Undue Influence or Duress
When contracts are assessed to be heavily one-sided (where one party unfairly benefits at the expense of the other), courts will often presume some degree of coercion is involved. After all, it would be highly unlikely that capable, logical parties would willingly enter into a contract where they would hardly benefit.
For cases involving undue influence, courts assess a variety of factors to determine whether the original contract is eligible for rescission. The exchange of value, free will, and other relevant factors influence the court's final determination.
This is a legal blog. It is not intended to be used as legal advice.
For further information please contact the law offices of attorney Ramona Kennedy.
Ramona Kennedy (Attorney) received her Jurisprudence Doctorate in America and is a licensed attorney in California (USA). Ramona Kennedy is a member of Orange County Trial Lawyers Association (OCTA).
Ramona Kennedy is fluent in English and Farsi (reading & writing) & speaks Azeri Turkish.
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