Revocation of a Contract: What is it Called?
When it comes to the legal world, it`s important to know the correct terminology. One term that can be tricky to remember is the word used to describe the act of revoking a contract. So, what is it called?
The term used to describe the revocation of a contract is “rescission.” Rescission is the process of canceling or terminating a contract. It can be initiated by either party involved in the contract or by mutual agreement.
Rescission can occur for various reasons. For example, if one party breaches the terms of the contract, the other party may seek rescission as a remedy. Additionally, if one party can prove that they entered into the contract under duress or other invalid circumstances, they may be able to rescind the contract.
It`s important to note that rescission does not always result in the parties simply going their separate ways. In some cases, the parties may be required to return any goods or services that have already been exchanged under the contract. They may also need to compensate each other for any damages caused by the rescission.
It`s also worth noting that rescission is not the same as termination. Termination typically occurs when a contract reaches its natural end date or when a specific condition outlined in the contract is met. Rescission, on the other hand, occurs when one of the parties takes action to cancel the contract before the natural end date or the fulfillment of the specific condition.
In conclusion, the revocation of a contract is called rescission. Rescission can be initiated by either party or by mutual agreement and can occur for various reasons. It`s important to understand the differences between rescission and termination and the potential consequences of rescission.