Hi, I’m Reed Bloodworth, the managing partner of Bloodworth Law with offices Orlando, Florida, and Winter Haven, Florida. At Bloodworth Law, we handle a broad range of business and contract litigation.
What Does It Mean to Rescind a Contract
Today, I am going to talk about rescission of a contract. What does it mean to rescind a contract?
When you sign a contract in Florida, you should generally assume that the contract will be enforced.
Rescission of a contract means the contract is unmade or undone from its very beginning. This means the contract no longer has any effect.
How Does Rescission Happen?
Rescission of a contract can happen:
- by mutual agreement of parties;
- by one of the parties declaring rescission of the contract, without the other if legally sufficient grounds exist or;
- by filing a lawsuit to get a court to declare the contract is rescinded.
As a cause of action in a complaint, rescission is an equitable cause of action used to undo a contract and put the parties back in the position they were before the formation of the contract. In other words, the current contract is undone and both parties are back to square one.
When Is Rescission Granted?
Under Florida law, rescission may be granted where a party breaches a contractual term that is an essential part of the bargain between contracting parties, to the point that a contract is essentially destroyed.
In order to maintain a cause of action for rescission in a lawsuit, a party must plead and prove several things:
- That the parties had entered into a contract;
- The existence of fraud, mutual mistake, false representation, impossibility of performance, or other ground for rescission;
- The party seeking rescission had rescinded the contract and notified the other party to the contract of such rescission;
- If the party seeking rescission has received benefits from the contract, he or she should offer to restore these benefits to the party furnishing them, if this is possible; and
- That the moving party has no adequate remedy at law — meaning that it is impossible to assign a known amount of money that would remedy the damage caused.
And, there you have it — a quick primer on rescission of contract.
Again, I’m Reed Bloodworth, the managing partner of Bloodworth Law. At Bloodworth Law, We travel to clients and courts across the state of Florida for the most interesting cases.If you have questions about contract or business litigation, give me a call. Let’s talk about how Bloodworth Law can help you and your business.