RESCISSION OF A CONTRACT. The destruction or annulling of a contract.
2. The right to rescind a contract seems to suppose not that the
contract has existed only in appearance; but that it has never had a real
existence on account of the defects which accompanied it; or which prevented
its actual execution. 7 Toul. n. 551 17 Id. n. 114.
3. A contract cannot, in general, be rescinded by one party unless both
parties can be placed in the same situation, and can stand upon the same
terms as existed when the contract was made. 5 East, 449; 15 Mass. 819; 5
Binn. 355; 3 Yeates, 6. The most obvious instance of this rule is, where one
party by taking possession, &c., has received a partial benefit from the
contract. Hunt v. Silk. 5 East, 449.
4. A contract cannot be rescinded in part. It would be unjust to
destroy a contract in toto, when one of the parties has derived a partial
benefit, by a performance of the agreement. In such case it seems to have
been the practice formerly to allow the vendor to recover the stipulated
price, and the vendee to recover, by a cross-action, damages for the breach
of the contract. 7 East, 480, in the note. But according to the later and
more convenient practice, the vendee, in such case, is allowed in an action
for the price, to give evidence of the inferiority of the goods in reduction
of damages, and the plaintiff who has broken his contract is not entitled to
recover more than the value of the benefit the defendant has actually
derived from the goods or labor; and when the latter has derived no benefit,
the plaintiff cannot recover at all. Stark. on Evidence, part 4, tit. Goods
sold and delivered; Chitty on Contr. 276.
5. A sale of land, by making a deed for the same, and receiving
security for the purchase money, may be rescinded before the deed has been
recorded, by the purchaser surrendering the property and, the deed to the
buyer, and receiving from him the securities he had given; in Pennsylvania,
these acts revest the title in the original owner. 4 Watts, 196, 199. But
this appears contrary to the current of decisions in other states and in
England. 4 Wend. 474; 2 John. 86; 5 Conn. 262; 4 Conn. 350; 4 N. H. Rep.
191; 9 Pick. 105; 2 H. Bl. 263, 264; Pre. in Chan. 235; 6 East, 86; 4 B. &
A. 672. See 7 East, 484; 1 Mass. R. 101 14 Mass. 282; Whart on's Dig. 119,
120 10 East, 564; 1 Campb. 78, 190; 3 Campb. 451; 3 Starkie, 32; 1 Stark. R.
108; 2 Taunt. 2; 2 New Rep. 136; 6 Moore, 114; 3 Chit. Com. L. 153; 1 Saund.
320, b. note; l Mason, 437; 1 Chip. R. 159; 2 Stark. Ev. 97, 280 8 lb. 1614,
1645 3 New Hamp. R. 455; 2 South, R. 780 Day's note to Templer v. McLachlan,
2 N. R. 141; 1 Mason, 93; 20 Johns. 196; 5 Com. Dig. 631, 636; and Com. Dig.
Action upon the case upon Assumpsit, A 1, note x, p. 829, for a very full
note; Com. Dig. Biens, D 3, n. s.
6. As to the cases where a contract will be rescinded in equity on the
ground of mistake, see Newl. Cont. 432; or where heirs are dealing with,
their expectancies, Ibid. 435; sailors with their prize money, Ibid. 443;
children dealing with their parents, Ibid. 445; guardians with their wards,
Ibid. 448; attorney with his client, Ibid. 453; cestui que trust, with
trustee, Ibid. 459; where contracts are rescinded on account of the
turpitude of their consideration, Ibid. 469; in fraud of marital rights,
Ibid. 424 in fraud of marriage agreement, Ibid. 417 on account of
imposition, Ibid. 351; in fraud of creditors, lb. 369; in fraud of
purchasers, Ib. 391; in fraud of a deed of composition by creditors, lb.
409.