Remedy 7- Rescission
Rescission basically refers to setting aside an agreement (typically a contract) as if it
had never existed. (Johnson v Agnew [1980] AC 367)
Typically applies where there has been:
1. Mistake - Johnson v Agnew [1980] AC367; Pitt v Holt [2013] UKSC 26; Great
Peace Shipping Ltd v Tsavliris Salvage (International) Ltd [2003] QB 679; Futter v
Revenue Commissioners [2013] UKSC 26
2. Misrepresentation- s.2(2) of the Misrepresentation Act 1967
3. Undue Influence- actual , presumed (Simpson v Simpson [1992] 1 FLR 601;
Mahoney v Purnell [1996] 3 All ER 61) and from a 3rd party (Royal Bank of Scotland v
Etridge ( no.2) [2001] 4 All ER 449, Consumer Credit Act 2006).
Contracts made in the course of a breach of fiduciary duty will also be liable to
rescission i.e. the self-dealing rule- Tito v Waddell ( No.2) [1977] Ch 106
Bars to Rescission:
1. It has to be practically possible- Cheese v Thomas [1994] 1 All ER 35
2. Cannot rescind a contract if the claimant has affirmed it- Long v Lloyd [1958] 2
All ER 402.
3. Third parties have acquired rights – Bona fide purchase for value without
notice (BFPFVWN aka equity’s darling’)
4. Delay (laches)- Leaf v International Galleries [1950] 2 KB 86
Rescission basically refers to setting aside an agreement (typically a contract) as if it
had never existed. (Johnson v Agnew [1980] AC 367)
Typically applies where there has been:
1. Mistake - Johnson v Agnew [1980] AC367; Pitt v Holt [2013] UKSC 26; Great
Peace Shipping Ltd v Tsavliris Salvage (International) Ltd [2003] QB 679; Futter v
Revenue Commissioners [2013] UKSC 26
2. Misrepresentation- s.2(2) of the Misrepresentation Act 1967
3. Undue Influence- actual , presumed (Simpson v Simpson [1992] 1 FLR 601;
Mahoney v Purnell [1996] 3 All ER 61) and from a 3rd party (Royal Bank of Scotland v
Etridge ( no.2) [2001] 4 All ER 449, Consumer Credit Act 2006).
Contracts made in the course of a breach of fiduciary duty will also be liable to
rescission i.e. the self-dealing rule- Tito v Waddell ( No.2) [1977] Ch 106
Bars to Rescission:
1. It has to be practically possible- Cheese v Thomas [1994] 1 All ER 35
2. Cannot rescind a contract if the claimant has affirmed it- Long v Lloyd [1958] 2
All ER 402.
3. Third parties have acquired rights – Bona fide purchase for value without
notice (BFPFVWN aka equity’s darling’)
4. Delay (laches)- Leaf v International Galleries [1950] 2 KB 86
