What is Repudiation? What is Rescission?

Repudiation vs. rescission

What is Repudiation?  What is Rescission?

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Repudiation and rescission are not synonyms and these commonly confused terms often trip up non-native English speaking lawyers.

Hi and welcome to TransLegal’s lesson of the week.

Today we’re going to be talking about repudiation and rescission. These are commonly confused terms and I want to drive home the point that they are not synonyms.

So to start with, rescission. Rescission refers to the act of rescinding or unmaking or undoing a contract. More specifically, it refers to the right of the parties to a contract to return to the identical state as before they entered into the agreement, in other words, the status quo ante.

This can occur by one of the parties declaring rescission of the contract without consent of the other party because of some defect in its formation, for example, misrepresentation, duress, or undue influence. It can also occur by mutual agreement of the parties, for example, if they reach a new agreement or a contract allows rescission by one of the parties based on the occurrence of a certain event, or through a court order, an equitable judicial remedy of rescinding a contract in a suit brought by one of the parties.

Repudiation, in contrast, refers to the refusal of a party to perform an obligation owed to the other party. It consists of such words or actions by the contracting party that indicate that they are not going to perform their part of the contract in the future. Now, because this occurs prior to the actual breach of the contract, repudiation is often referred to as anticipatory breach.

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