In the world of business, contracts are a crucial part of maintaining a smooth and successful operation. However, there are times when a contract may need to be rescinded, or cancelled, due to various reasons such as fraud, misrepresentation, mistake, duress, and undue influence. In this article, we will discuss some cases on rescission of contracts and explore the legal implications of such cases.
One of the most common grounds for rescission is fraud. In the case of Gillette Co. v. Lash, a company purchased a parcel of land based on the representation that it was suitable for a manufacturing plant. However, after the purchase, the company found that the land was actually prone to flooding and was not suitable for their use. The court allowed the contract to be rescinded due to the seller`s fraudulent misrepresentation.
Another common ground for rescission is mutual mistake. In the case of Sherwood v. Walker, a cow was sold for a low price due to the mistaken belief that it was barren. However, it was later discovered that the cow was pregnant and would be worth significantly more. The court allowed the contract to be rescinded due to the mutual mistake of both buyer and seller.
Duress is another ground for rescission. In the case of Barton v. Armstrong, a man was forced to sign a promissory note under threat of violence. The court allowed the contract to be rescinded due to the defendant`s use of duress.
Undue influence is also a ground for rescission. In the case of Barclay v. Pearson, an elderly woman was coerced into signing a will that left her entire estate to her caretaker. The court allowed the will to be rescinded due to the undue influence exerted by the caretaker.
Misrepresentation is also a ground for rescission. In the case of Johnson v. Davis, a seller failed to disclose a known defect in a house that was sold. The court allowed the contract to be rescinded due to the seller`s misrepresentation.
In all these cases, the rescission of the contract was allowed due to the presence of one of the grounds for rescission. It is important for businesses to be aware of these grounds and to ensure that all contracts are entered into fairly and with all necessary information disclosed.
In the event that a contract needs to be rescinded, it is important to follow the proper legal procedures to avoid any further legal complications. Seeking the advice of a legal professional is highly recommended in such cases.
In conclusion, rescission of contracts can occur due to various reasons including fraud, mutual mistake, duress, undue influence, and misrepresentation. Businesses must be aware of these grounds and take necessary precautions to ensure that all contracts are entered into fairly and with full disclosure. In the event of a need for rescission, it is crucial to follow proper legal procedures to avoid further complications.
