RESCISSION OF CONTRACTS IN CALIFORNIA

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1 Home Eugene E. Kinsey, Attorney at Law Phone: Fax: Web: Main St., 2nd Floor, Seal Beach, CA RESCISSION OF CONTRACTS IN CALIFORNIA (NEW: Choose Full Service Or Represent Yourself) Rescission Of Contracts - General Concepts 1688 et seq.). The remedy assumes the contract was properly came into existence; and its terms cease When You Need An Experienced Family Law Attorney essential terms--i.e., that the parties lacked contractual intent--means one party has taken possession, there may be an equitable remedy. But there is no remedy of rescission, " or unilaterally by a party upon proper "action for rescission" is actually a suit to enforce to the status quo) based upon rescission. Grounds for rescission may also support other contract remedies; but, because rescission is of contract. Nonetheless, they are based on consistent facts) and is Grounds For Rescission Mutual Consent Of The Parties: A contract may always be rescinded upon the mutual consent of the parties thereto. But rescission at only one party's behest requires proper notice on statutory to be rescinded was required by the statute of frauds to be conduct that is inconsistent with continued existence of the by subsequent execution of Kinsey s Eugene E. Kinsey Seal Beach, CA (562) Since Negotiation - - Settlement - - Trial - Us Unilateral Rescission On The Basis Of Mistake, Fraud, or Duress: by a party whom Page 1 of 5

2 fraud was perpetrated. Consent Mistakenly Given: Rescission may be material "mistake of fact" or "mistake Mistake Of Fact: a "mistake of fact" when, not because of his or or in the past In effect, this type of mistake relates to an erroneous belief to the contract. Unilateral Mistake Of Fact: Rescission for a unilateral mistake of fact is authorized where "the effect of the mistake is such that enforcement of the contract would be unconscionable." In such cases, it need not mistake. procedural unconscionability and surprise ordinarily results from the mistake--not from Limitation - No Rescission For Party Bearing The Risk Of The Mistake: Rescission is at issue. A party bears the risk of a the party is aware when the contract is made that he or the mistake 825; Rest.2d Rescission where unilateral mistake of fact unknown to nonrescinding party: Rescission on the basis of a unilateral mistake of fact is not barred by the fact the other party was unaware of the not cause the other party's unilateral mistake of fact, the contract was made; the mistake; and of the contract would be unconscionable. Mistake Of Law: A mistake of law occurs when a party to the contract knows the facts as they actually are but of those facts. know and understand the law but all are mistaken in the same law but does his or her contractual duties or other contractual terms, of the contract from its inception, does not warrant rescission based on mistake of law. precludes rescission or reformation based on a mistake of Page 2 of 5

3 at consent was relationship. Fraud: to support a unilateral rescission may be either an "actual presumption of especially where a of "fraud," innocent misrepresentation supports rescission as a type of "mistake". the substantially based under the innocent party cannot restore the identical consideration, an equitable result. Failure Of Consideration: A unilateral rescission can be based on a failure of consideration in three situations party or fails in a material respect from any cause before it is rendered Illegality: rescission if it is unlawful "for causes which do not appear in its terms and conditions" and "the parties are Public Interest: A party may also rescind Particular Statutory Grounds: a basis for rescission in particular contractual relationships Notice Requirement For Unilateral Rescission and is Thereafter, the way, an action to Page 3 of 5

4 notice has not otherwise Despite the statutory requirement that notice of rescission notice will on the part of the party prerequisite for the remedy. The... requirement is essentially one of freedom from laches. Its application depends on whether, fraud, or reliance on the other party's facts the "cannot play fast and loose. He cannot conduct himself will be presumed of the contract were induced by the other party's fraud. based to is concluded. in the Restoration Of Consideration under the contract or offer to "upon condition that the other party do likewise" refuses to return the parties to their precontract status quo positions. Thus, in a real property purchase and sale transaction, a rescission the buyer. rescissionary relief "shall be deemed" to be the requisite restoration. Relief Based Upon Rescission and the parties to the position they were in before the contract such parties. Page 4 of 5

5 or an or she rewrite the terms include an award of all out-of-pocket expenses incurred in reliance on the awarded are certain or capable of ascertainment. complete relief"; and it also states that a "claim Choose Full Service Or Represent Yourself: Attorney Fees & Costs: Attorney Assisted: See Sample Attorney Fee Agreement For Limited Scope Services Full Service: See Sample Agreement For Full Service As Attorney Of Record Home The Firm For Clients For Lawyers Free Stuff Law Library Legal Links Lawyer Jokes Page 5 of 5