§ 19-10 Contract - Rescission

• Library: South Carolina Requests to Charge - Civil (SCBar) (2016 Ed.)

§ 19-10 Contract - Rescission

The right to rescind a contract is based upon equitable principles, and where one party to a contract that fixes no time for its performance by the other seeks to rescind it because of the other's delay in performance, equitable considerations determine whether the contract may be rescinded and good faith on the part of the rescinding party is quite important.

The breach of a contract, to justify its rescission, must be so substantial and fundamental as to defeat the purpose of the contract. Rescission entitles the party to a return of the consideration paid, as well as any additional sums necessary to restore him to the position occupied prior to the making of the contract.

If there was a failure on the part of the plaintiff to comply with the express stipulation of the contract, and if there was no waiver by the defendant of such breach of the contract, then the defendant would be relieved of any legal obligation under the contract. If there was a failure on the part of the defendant to comply with the express stipulation of the contract and if there was no waiver by the plaintiff of such breach of the contract, then the plaintiff would be relieved of any legal obligation under the contract.

It was a party's duty, if he intended to rescind, promptly and unequivocally to notify the other party of his intention to do so. The basis of the rule requiring notice of intention to rescind is to be found in the reluctance of the courts to enforce penalties and forfeitures in matters of contract. The courts generally require the party complaining of a breach of contract to prove his actual damages and limit his recovery to the amount thereof. Courts do not allow a rescission of the contract for mere delay in performance unless the parties have made time of the essence of the contract.

Where time is of the essence of the contract, failure to perform within the time stipulated is ground for rescission. If time is not of the essence, mere delay in performance is not considered a material breach justifying rescission. Mere delay in the execution of a contract, the terms of which will be satisfied by performance within a reasonable time, does not, in itself, entitle the other party to rescind, but, to have this effect, the implication arising from nonperformance of the contract must be inconsistent with its being still in force. Where it is intended that performance shall be within a reasonable time, one party may not suddenly, and in the...