California Real Estate SalespersonContractsHard
A buyer discovers that the seller made a material misrepresentation about the property's condition before closing. The buyer wants to cancel the contract and have both parties restored to their pre-contract positions. This remedy is called:
- ARescission
- BSpecific performance
- CNovation
- DLiquidated damages
Show answer & explanationAnswer & explanation
Correct answer: A. Rescission
Rescission is an equitable remedy that cancels the contract and attempts to restore both parties to the position they were in before the contract was formed, often used when fraud or material misrepresentation occurred.
Why the other options are wrong
- B. Specific performance compels completion of the contract, not cancellation.
- C. Novation substitutes a party or obligation; it does not cancel and restore original positions.
- D. Liquidated damages is a predetermined monetary remedy, not a restoration of positions.
Rescission
An equitable remedy that cancels a contract and restores both parties to the position they held before the contract was made, often used in cases of fraud or mistake.
- Requires restoring any benefits received (restitution)
- Common remedy for fraud, misrepresentation, or mutual mistake
- Different from specific performance, which enforces the contract
Memory trick: Rescind = rewind the deal