Rescission of Contract under the Specific Relief Act
What is Rescission of Contract?
Rescission means the cancellation or annulment of a contract, restoring the parties to their original position, as if the contract never existed.
Rescission under the Specific Relief Act, 1963
The Specific Relief Act, 1963 provides remedies to enforce contracts and also allows for rescission in certain cases.
Key Provisions Related to Rescission:
Section 39 of the Specific Relief Act deals with rescission of contracts in cases of mutual mistake or fraud.
Grounds for Rescission:
Mutual Mistake — If both parties are mistaken about a material fact on which the contract is based, the contract can be rescinded.
Fraud — If one party has been induced to enter the contract by fraud, the contract can be rescinded.
Other grounds — Sometimes, contracts can be rescinded for reasons like undue influence, misrepresentation, or breach.
Effect of Rescission:
The contract is treated as if it never existed.
Both parties are restored to their original positions (restitution).
Neither party can enforce the contract or claim damages for breach after rescission.
Important points:
Rescission must be prompt; delay in rescinding may bar the right.
It’s an equitable remedy, meaning courts have discretion in granting it based on fairness.
Summary:
| Aspect | Rescission under Specific Relief Act |
|---|---|
| Legal Nature | Cancellation of contract |
| Grounds | Mutual mistake, fraud, undue influence, misrepresentation |
| Remedy | Restores parties to original position |
| Effect | Contract treated as void ab initio (from beginning) |
| Court’s Role | Discretionary equitable relief |
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