Elements for the Remedy of Rescission

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In Nevada, rescission is a remedy which allows the harmed party, either through unilateral action, or through the institution of a suit in equity, to abrogate or cancel a contract totally, returning the parties to the positions they held prior to the execution of the contract.

  1. Existence of fraud, mutual mistake, false representations, impossibility of performance, or other ground for rescission or cancellation of a contract;
  2. Suit for rescission – equitable remedy totally abrogating a contract and placing the parties in the positions they occupied prior to executing the contract;
  3. Where a contract has been partially performed under equitable rescission, the party performing must elect to rescind or affirm the contract but cannot do both. Rescission requires immediate restitution, or return of whatever of value was received; and
  4. Where there has been a valid rescission of contract, there is no contract to enforce and therefore no possible cause of action for breach.

Pacific Maxon, Inc. v. Wilson, 96 Nev. 836, 619 P.2d 816; Scaffidi v. United Nissan, 425 F. Supp. 2d 1172 (D. Nev. 2005). Great Am. Ins. Co. v. Gen. Builders, Inc., 113 Nev. 346, 934 P/2d 257, 262 n.6 (1997)(“A priori, where there has been a valid rescission of the contract, there is no longer any contract and, therefore, no longer a cause of action for breach.”).  Rescission voids a contract.  Bergstrom v. DeVoe, 109 Nev.575, 577, 854 P.2d 860, 862 (1993).  Restitution is a form of rescission.  Reed v. Sixth Jud. Dist. Ct., 75 Nev. 338, 341, 341 P.2d 100, 101 (1959); Dan B. Dobbs, Law of Remedies, 552 (2d. Ed. 1993).  Rescission and damages are inconsistent; election of one is a bar to the other.  Mullinix v. Morse, 81 Nev. 451, 454, 406 P.2d 298, 300 (1965).

 

See elements for other claims at the Nevada Law Library

About the Author

Jay Young is a Las Vegas, Nevada attorney. His practice focuses on acting as an Arbitrator and Mediator.

Mr. Young can be reached at 702.667.4868 or at jay@h2law.com.

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