A party seeking rescission of a contract must give back all that he received. The purpose of rescission is still to restore the parties as nearly as possible to the position in which they were before the contract was made. Bowen LJ said: ‘when you come to consider what is the exact relief to which a person is entitled in a case of misrepresentation it seems to me to be this, and nothing more, that he is entitled to have the contract rescinded, and is entitled accordingly to all the incidents and consequences of such rescission. It is said that the injured party is entitled to be replaced in statu quo. It seems to me that when you are dealing with innocent misrepresentation you must understand that proposition that he is to be replaced in statu quo with this limitation – that he is not to be replaced in exactly the same position in all respects, otherwise he would be entitled to recover damages, but is to be replaced in his position so far as regards the rights and obligations which have been created by the contract into which he has been induced to enter. That seems to me to be the true doctrine, and I think it is put in the neatest way in Redgrave v Hurd .’
Judges:
Bowen LJ
Citations:
(1886) 34 Ch D 582
Jurisdiction:
England and Wales
Cited by:
Appeal from – Adam v Newbigging HL 1988
There was a sale of a share in a partnership, which had become insolvent since the contract.
Held: The House ordered rescission and mutual restitution, though the misrepresentation was not fraudulent, and it gave ancillary directions so as to . .
Cited – Fiona Trust and Holding Corp and others v Privalov and others ComC 20-Oct-2006
The parties disputed whether their claim should be arbitrated.
Held: A claim as to whether the contract itself had been made was not one which could be arbitrated by provisions in that contract. It does not arise ‘under’ the contract. The . .
Lists of cited by and citing cases may be incomplete.
Company, Contract, Contract
Updated: 23 March 2022; Ref: scu.214456
