rescission

Definition of rescission

Noun

rescission (plural rescissions)

1. An act of removing, taking away, or taking back.
2. (law) The undoing of a contract; repeal.

Anagrams

• Anagrams of ceiinorsss
• recissions

Further reading

In contract law, rescission (to rescind or set aside a contract) has been defined as the unmaking of a contract between parties.[1] Rescission is the unwinding of a transaction. This is done to bring the parties, as far as possible, back to the position in which they were before they entered into a contract (the "status quo ante").

In court

Recission is an equitable remedy and is discretionary. A court may decline to rescind a contract if one party has affirmed the contract by his action (see Long v Lloyd [1958] 1 WLR 753) or a third party has acquired some rights or there has been substantial performance in implementing the contract.

In common law jurisdictions, court judgments may also be rescinded, here meaning to be set aside or made void, on application to the court that granted the judgment or a higher court. Applications to rescind a judgment are usually made on the basis of error or for good cause.

By private companies

In finance, law, and insurance, rescission is the termination of a contract from the beginning (as if it never existed), rendering it void ab initio. The insurer has the right to rescind a policy due to concealment, material misrepresentation, or material breach of warranty. In 2008, one judge ruled that borrowers who refinanced into an adjustable-rate mortgage could force a bank to rescind mortgage loans if it acted similarly inappropriately.

In 2009, during the national debate over U.S. health care reform, rescission became popularly understood as a process by which insurance companies canceled a policyholder's insurance, sometimes after the patient was diagnosed with an expensive-to-treat illness, sometimes by claiming that the patient previously withheld information about their medical condition.

By government

In American government, rescission authority rests with the President. This authority was granted in the Congressional Budget and Impoundment Control Act of 1974. The President can force Congress to vote on rescinding (or permanently withholding) already appropriated funds. The average amount that Presidents requested between 1974 and 2005 was about $15 billion.

In parliamentary procedure, the motion to rescind, repeal or annul is used to cancel or countermand a motion previously adopted.