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The move from acknowledging rescission ab initio (“rescission”) as a remedy for breach of contract to rejecting it as a remedy for breach of contract has been quite dramatic. ... By tracing the history of the common law and it’s interpretation of rescission as a remedy for breach of contract, we are better able to understand the final position of the law.
Early English common law recognised that rescission was a remedy for a breach of contract.
In De Bernardy v Hardy the Court said:
“The defendant having refused to perform his part of the contract, the plaintiff was entitled to treat it as rescinded, and sue on quantum meruit. In general, where a contract is rescinded, the work done under it must be paid according to its value…The contract having been rescinded, no action would lie for the breach of it.”
This case is an early example of the general acceptance that rescission was a remedy for breach of contract. ...
An action for damages for breach of contract for failing to complete and in the alternative, rescission of the contract was sought.
It was held that there was no distinction between the nature of a repudiation which was required to constitute an anticipatory breach of contract. The plaintiff never made time of the essence and that the defendant had never repudiated the contract. Consequently, there was no breach and so the claim for damages failed.
The claim for rescission also failed in as much as the cases indicated that there was a well established principle that if a contract was to be rescinded, it must be rescinded in total, the parties being put in status quo. ... This further highlights that in the event of a breach of contract, and in the scenario where parties can be returned to their original position, rescission is a valid remedy for such a breach. ...
It was held that the order dated 1 June 1972 correctly recited that the defendant had repudiated the contract and recognised and confirmed the plaintiff’s election to rescind rather than claim specific performance. It ought to be treated as recognising that the plaintiff’s decision to rescind was valid and that the contract was at an end at the latest by June 1. Lastly, a party who rescinded a contract for the sale of land had a right to be restored to his former position. ... At all events, the order of June 1 plainly states that what the plaintiffs have done is to rescind the contract so that one way or another the contract was at an end at the latest by June 1.”
The order for rescission merely confirmed the decision to rescind that was made upon the breach of contract.
This particular case has been highlighted as the authority (albeit incorrectly) for the acceptance that rescission is a remedy for breach of contract.
Approximate Word count = 2344
Approximate Pages = 9.4
(250 words per page double spaced)
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