What Does ‘Rescission’ Mean in Contract Law?

Rescission sets a contract aside and aims, so far as possible, to restore the parties to the position they were in before it was made.

This explanation covers England and Wales.

Lowdown

Rescission is different from ordinary termination. Termination usually ends future obligations, while rescission aims to unwind the agreement and restore the parties to their original positions.^[1]

Why It Matters

Rescission is only available in particular circumstances. Misrepresentation, meaning a false statement that influences someone to enter a contract, duress, meaning illegitimate pressure, and undue influence can provide grounds for rescission.

Misrepresentation is a common example. The Misrepresentation Act 1967 allows a court or arbitrator, in certain non-fraudulent cases, to award damages instead of rescission.^[2]

Rescission is not automatic. It may be unavailable if too much time has passed, you have chosen to continue with the contract, or an innocent third party has acquired rights. It can also be unavailable if the parties cannot substantially be restored to their original positions, although an exact reversal is not always necessary.^[1]

Do not treat rescission as another word for ending a contract because of an ordinary breach. If you think a contract should be unwound, get advice before taking steps that assume it has ended.

Our Conclusion

Rescission is a specific remedy that aims to set a contract aside from the start. Whether it is available depends on why the contract is being challenged and the surrounding circumstances.

Sources

[1] LexisNexis, Rescission of a contract (updated 21 May 2026)

[2] Misrepresentation Act 1967, section 1: Rescission and section 2: Damages for misrepresentation