Rescission of contracts [Section 27-30] - Lawyer Adda

Rescission of contracts [Section 27-30]


The termination of contract may be allowed by court when the contract
is voidable by plaintiff or the contract is unlawful for causes not apparent
on its face.

What is voidable contract?

According to section 2(i) of contract act 1872, an agreement which is
enforceable by law at the option of one or more of the parties but not at
the option.

When the contract is voidable by plaintiff?

In two situations specified under Indian contract act, the contract is

1. According to section 19 of contract Act when the consent to an
agreement is caused by coercion, fraud or misrepresentation the contract
is voidable at the option of the party, whose consent was so obtained.

2. According to section 19 A of contract Act when the consent of a party
has been obtained by undue influence the contract is voidable at the
option of the party whose consent has been so obtained.

There are limitations to the right of rescission of contract. In other
words, in the specified circumstances under section 27(2), court may not
grant rescission of contract.

It is very logical that when specific performance in the in the favor of
purchaser has been granted and he (purchaser) fails to pay purchase
money then in the same suit in which same suit in which specific
performance has been bordered, thereafter order the rescission or
cancellation of the contract.

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