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Rescission - By Agreement, Wrong Or Default Of Adverse Party, Nonperformance Or Breach - Inadequate Consideration, Time

fraud abrogation contract circumstances

The abrogation of a contract, effective from its inception, thereby restoring the parties to the positions they would have occupied if no contract had ever been formed.

Inadequate Consideration

Mere inadequacy of consideration is not a sufficient reason to justify rescission. When the consideration is so inadequate that it shocks the conscience of the court or is so closely connected with suspicious circumstances or misrepresentations as to provide substantial evidence of fraud, it can furnish a basis for relief.

Time

A right to rescind must be exercised promptly or within a reasonable time after the discovery of the facts that authorize the right. A reasonable time is defined by the circumstances of the particular case. The rule that rescission must be prompt does not operate where an excuse or justification for a delay is shown.

FURTHER READINGS

McGowan, Diane M., and A. Thomas Brisendine. 2001. "Option Medley Continued: Rescissions." Benefits Law Journal 14 (autumn).

Sherwin, Emily. 2003. "Nonmaterial Misrepresentation: Damages, Rescission, and the Possibility of Efficient Fraud." Loyola of Los Angeles Law Review 36 (winter).

CROSS-REFERENCES

Abrogation; Contracts; Fraud.

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