{"id":26902,"date":"2022-09-05T03:28:18","date_gmt":"2022-09-05T03:28:18","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/amjur\/contracts-sect-513.html"},"modified":"2022-08-25T11:47:54","modified_gmt":"2022-08-25T11:47:54","slug":"contracts-sect-513","status":"publish","type":"amjur","link":"https:\/\/reference.findlaw.com\/amjur\/contracts-sect-513.html","title":{"rendered":"Am Jur 2d – Contracts \u00a7 513"},"content":{"rendered":"
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V. Modification, Extinguishment, and Renewal, C. Rescission, Termination, or Discharge, 1. Nature of Contractual Rescission, Termination, or Discharge, \u00a7 513 – Methods of discharge or termination of contracts<\/h2>\n

Generally, a contract may be canceled only under its own terms or through mutual agreement.[1<\/a>] Contracts have the effect of law for the parties and may be dissolved only through the consent of the parties or on grounds provided by law.[2<\/a>] A contract may be discharged by performance in accordance with its terms,[3<\/a>] or by the expiration of the time during which it is to remain operative.[4<\/a>] In addition, there are several other methods of discharging contracts, including rescission by agreement or by virtue of a contractual provision,[5<\/a>] rescission for original invalidity,[6<\/a>] and rescission for failure of consideration[7<\/a>] or a material breach or default.[8<\/a>] Parties to a valid contract may rescind or abandon it,[9<\/a>] or substitute another in its place,[10<\/a>] or by conduct inconsistent with the continued existence of the original contract estop themselves from asserting any right thereunder.[11<\/a>]<\/p>\n

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Definition:<\/div>\n

To “rescind” a contract is to abrogate or cancel the contract, unilaterally or by agreement, or to make void; to repeal or annul.[12<\/a>]<\/p>\n<\/div>\n

Rescission is an equitable remedy that invalidates an agreement,[13<\/a>] not a cause of action,[14<\/a>] which rests on the equitable principle that a person shall not be allowed to enrich him- or herself unjustly at the expense of another.[15<\/a>] The effect of the remedy of rescission is generally to extinguish a rescinded contract so effectively that in contemplation of law it has never had existence,[16<\/a>] and to put or restore the parties to status quo.[17<\/a>] The remedy of rescission and restitution is an alternative to damages in an action for breach of contract.[18<\/a>]<\/p>\n

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Practice Tip:<\/div>\n

The termination of a contract is not presumed, and the burden of establishing it rests upon the party who asserts it.[19<\/a>]<\/p>\n<\/div>\n

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All case links go to Westlaw and require login.<\/h2>\n<\/div>\n

1<\/a> \u00a0 Innovative Modular Solutions v. Hazel Crest School Dist. 152.5, 2012 IL 112052, 358 Ill. Dec. 343, 965 N.E.2d 414, 279 Ed. Law Rep. 424 (Ill. 2012)<\/a> <\/span>, as modified on denial of reh’g, (Mar. 26, 2012).
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2<\/a> \u00a0 Mobile-One Auto Sound, Inc. v. Whitney Nat. Bank, 78 So. 3d 807 (La. Ct. App. 4th Cir. 2011)<\/a> <\/span>.
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3<\/a> \u00a0 M.M. & D.D. Brown v. Western Maryland Ry. Co., 84 W. Va. 271, 99 S.E. 457, 4 A.L.R. 522 (1919)<\/a> <\/span>.
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4<\/a> \u00a0As to duration and expiration of contract, see \u00a7\u00a7 519<\/a> <\/span>, 520<\/a> <\/span>.
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5<\/a> \u00a0 In re Nickels Midway Pier, LLC, 372 B.R. 218 (D.N.J. 2007)<\/a> <\/span>.
<\/span> \u00a0As to rescission by agreement, see \u00a7\u00a7 524<\/a> <\/span> to 534<\/a> <\/span>.
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6<\/a> \u00a0As to rescission for cause and invalidity of contract, see \u00a7\u00a7 536<\/a> <\/span> to 538<\/a> <\/span>.
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7<\/a> \u00a0As to rescission for cause and failure or want of consideration, see \u00a7 539<\/a> <\/span>.
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8<\/a> \u00a0As to breach or default in performance, see \u00a7\u00a7 541<\/a> <\/span> to 554<\/a> <\/span>.
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9<\/a> \u00a0As to abandonment, see \u00a7\u00a7 517<\/a> <\/span>, 518<\/a> <\/span>.
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10<\/a> \u00a0As to modification by consent or new agreement, see \u00a7 496<\/a> <\/span>.
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11<\/a> \u00a0 Hinshaw v. Ligon Industries, L.L.C., 551 F. Supp. 2d 798 (N.D. Iowa 2008)<\/a> <\/span>.
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12<\/a> \u00a0 Devine v. Buki, 289 Va. 162, 767 S.E.2d 459 (2015)<\/a> <\/span>; Bossie v. Boone County Bd. of Educ., 211 W. Va. 694, 568 S.E.2d 1, 168 Ed. Law Rep. 945 (2002)<\/a> <\/span>.
<\/span> \u00a0“Rescission” of a contract is the abrogation, annulment, avoidance, or cancellation of the contract, especially a nullification of the contract by act of a party. Hoeft v. Five Points Bank, 248 Neb. 772, 539 N.W.2d 637 (1995)<\/a> <\/span>.
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13<\/a> \u00a0 Haman Ents., Inc. v. Sharper Impressions Painting Co., 2015-Ohio-4967, 50 N.E.3d 924<\/a> <\/span> (Ohio Ct. App. 10th Dist. Franklin County 2015).
<\/span> \u00a0A rescission is an avoidance of a transaction and will normally be accompanied by restitution on both sides; rescission is thus less a remedy and more a matter of conceptual apparatus that leads to the remedy. Kofmehl v. Baseline Lake, LLC, 167 Wash. App. 677, 275 P.3d 328 (Div. 3 2012)<\/a> <\/span>, aff’d, 177 Wash. 2d 584, 305 P.3d 230 (2013)<\/a> <\/span>.
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14<\/a> \u00a0 Taguinod v. World Sav. Bank, FSB, 755 F. Supp. 2d 1064 (C.D. Cal. 2010)<\/a> <\/span>; Barnett v. Countrywide Bank, FSB, 60 F. Supp. 3d 379 (E.D. N.Y. 2014)<\/a> <\/span>.
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15<\/a> \u00a0 Lenel Systems Intern., Inc. v. Smith, 106 A.D.3d 1536, 966 N.Y.S.2d 618 (4th Dep’t 2013)<\/a> <\/span>.
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16<\/a> \u00a0 Graves v. Wayman, 859 N.W.2d 791 (Minn. 2015)<\/a> <\/span>.
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17<\/a> \u00a0 Lenel Systems Intern., Inc. v. Smith, 106 A.D.3d 1536, 966 N.Y.S.2d 618 (4th Dep’t 2013)<\/a> <\/span>.
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18<\/a> \u00a0 Little Mountains Enterprises, Inc. v. Groom, 141 Conn. App. 804, 64 A.3d 781 (2013)<\/a> <\/span>.
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19<\/a> \u00a0 Armour & Co. v. Celic, 294 F.2d 432 (2d Cir. 1961)<\/a> <\/span>.
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Read this complete Am Jur 2d section on Westlaw<\/a><\/b><\/div>\n","protected":false},"parent":0,"menu_order":0,"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":false,"_modified_date":"","_cloudinary_featured_overwrite":false},"class_list":["post-26902","amjur","type-amjur","status-publish","hentry"],"acf":[],"_links":{"self":[{"href":"https:\/\/reference.findlaw.com\/legal-api\/wp-json\/wp\/v2\/amjur\/26902","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/reference.findlaw.com\/legal-api\/wp-json\/wp\/v2\/amjur"}],"about":[{"href":"https:\/\/reference.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/amjur"}],"wp:attachment":[{"href":"https:\/\/reference.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=26902"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}