In contract law, rescission is an equitable remedy which allows a contractual party to cancel the contract. Parties may rescind if they are the victims of a vitiating factor, such as misrepresentation, mistake, duress, or undue influence. Rescission is the unwinding of a transaction.

What is an example of rescission?

Rescission Example

The most common example of rescission is the three-day right of rescission, in which a borrower refinancing a loan has extra time to reconsider the decision. ... The borrower must affirm the decision to exercise the right of rescission by midnight of the third day after signing the contract.

What is the legal term rescission mean?

Cancellation of a contract. Rescission may be unilateral, as when a party rightfully cancels a contract because of another party's material breach. Rescission can also be mutual, as when the contracting parties agree to discharge all remaining obligations.