Page:12
Part VI Other Bars, 23 Affirmation »
Dominic O’Sullivan
From: The Law of Rescission (3rd Edition)Dominic O'Sullivan KC, Steven Elliott KC, Rafal Zakrzewski
In situations that express both rescission and affirmation, this chapter examines an affirmation of a transaction where actions result in the loss of the right. It explains how the right to rescind is lost by affirmation when the party entitled to rescind unequivocally manifested an intention to affirm once free from the effects of the vitiating factor. The waiver by election results from the decision to not rescind. However, the electing party must hold alternative rights that are inconsistent with one another. The chapter then expounds on the justification for permanently depriving a person of the right to rescind after expressing an intention to confirm. As a general rule, affirmation is irrevocable.
Part VI Other Bars, 25 Bankruptcy and Winding Up »
Dominic O’Sullivan
From: The Law of Rescission (3rd Edition)Dominic O'Sullivan KC, Steven Elliott KC, Rafal Zakrzewski
This chapter explores the general rule wherein the right to rescind survives the bankruptcy or winding up of the party against whom the right is available. Generally, recission is not barred as it will prejudice unsecured creditors of the guilty party by shrinking the pool of assets available to satisfy their claims. Moreover, a voidable share allotment cannot be rescinded after winding up commences. The chapter also studies the special bar that prevents a shareholder in a limited liability company from rescinding a statutory contract with the company. However, some statutory rights to rescind could be active if an irregular share allotment is on the line.
Part VI Other Bars, 27 Bars for Non-Fraudulent Misrepresentation »
Dominic O’Sullivan
From: The Law of Rescission (3rd Edition)Dominic O'Sullivan KC, Steven Elliott KC, Rafal Zakrzewski
This chapter focuses on the four bars for non-fraudulent misrepresentation. Innocent misrepresentation had been recognized as a ground for rescission, but it has a special potential to cause prejudice and disrupt settled expectations. The chapter acknowledges the lack of uniformity in principles applied in England and other jurisdictions such as New Zealand, Australia, and Canada. It looks into the nature of the bar in line with transferring titles to either real property or personal property. Moreover, incorporation was known to merge the representation into a higher contractual right that extinguished the claim to rescind. The chapter also covers the bar on rescinding the contract for the sale of goods.
Part III Rescission By Election and By Court Order, 10 Common Law, Equity, and Fusion »
Dominic O’Sullivan
From: The Law of Rescission (3rd Edition)Dominic O'Sullivan KC, Steven Elliott KC, Rafal Zakrzewski
This chapter discusses common law, equity, and fusion. It recognizes how the separate origins of recissions at law and in equity had hampered the development of clear rules that regulated the relationship between doctrines. Thus, questions arose on how far the fusion or synthesis of common law and equity had gone. The structure of rescission at common law was a by-product of the availability of different forms of action in line with the reorganization of the law of contract. The chapter notes fraud, bribery, duress, or contracts of insurance for material non-disclosure and non-fraudulent misrepresentation as grounds of rescission at law.
Part II Grounds, 8 Conflict of Interest »
Dominic O’Sullivan
From: The Law of Rescission (3rd Edition)Dominic O'Sullivan KC, Steven Elliott KC, Rafal Zakrzewski
This chapter explores how a conflict of interest in a case could trigger a rescission. Transactions involving the purchase or sale of trust are declared void and subject to rescission. A fair-dealing rule regulates the transactions between fiduciaries and their principals. The danger arises when a fiduciary would be tempted to favour his interests by disregarding his duty towards their principal. The chapter covers the nature and basis of the fair-dealing rule, while also tackling its relationship with presumed undue influence. It cites double employment, causation irrelevant, and bribery as examples that trigger a conflict of interest and a contract’s rescission.
Contents »
Dominic O’Sullivan, Steven Elliott, Rafal Zakrzewski
From: The Law of Rescission (3rd Edition)Dominic O'Sullivan KC, Steven Elliott KC, Rafal Zakrzewski
Part VI Other Bars, 26 Contracting Out »
Dominic O’Sullivan
From: The Law of Rescission (3rd Edition)Dominic O'Sullivan KC, Steven Elliott KC, Rafal Zakrzewski
This chapter examines the freedom parties have to contract out of rescission for misrepresentation. It clarifies the impossibility to contract out of the right to rescind for duress. The right to rescind for non-fraudulent misrepresentation can be limited or excluded by an express provision of the agreement. The chapter then discusses the types of clauses that forbid rescission for non-fraudulent misrepresentation. A non-reliance clause takes effect when no party has entered an agreement with reliance on any representation of the other party. The chapter also expounds on the terms of contracting out under the Misrepresentation Act 1967 and the Consumer Rights Act 2015.
Part I Introduction, 1 Core Distinctions »
Dominic O’Sullivan
From: The Law of Rescission (3rd Edition)Dominic O'Sullivan KC, Steven Elliott KC, Rafal Zakrzewski
This chapter introduces the concept of rescission. It starts with the definitions of recissions correlating to ab initio and de futuro. Ab initio refers to the recission of a contract for fraud and other vitiating events from the beginning, while de futuro refers to when a contract had been brought to conclusion for subsequent breach or frustration. The law of recission primarily focuses on voidable contracts instead of void contracts or contracts that are ineffective until ratified. The chapter then discusses the similarities and differences of the law of recission within the US and the UK. It also looks into the rescission and transactions ineffective in equity.
Part VI Other Bars, 24 Delay and Estoppel »
Dominic O’Sullivan
From: The Law of Rescission (3rd Edition)Dominic O'Sullivan KC, Steven Elliott KC, Rafal Zakrzewski
This chapter discusses the loss of the right to rescind following the failure to exercise it. It outlines the different doctrines that are engaged when delay prevents rescission. The doctrines mainly include three categories: culpable delay that results in undue prejudice; a delay that causes the right to rescind to expire due to the statute of limitations; and delay that results in an inference of waiver. However, a delay is not essential prior to rescission being barred by estoppel. The chapter explains how estoppel is governed by general principles due to the lack of authority. It examines how estoppel might arise following a consistent course of dealings, conducted on the footing that a right to rescind would not be exercised.
Part VI Other Bars, 28 Disproportionate Effect: Section 2(2) of the Misrepresentation Act 1967 »
Dominic O’Sullivan
From: The Law of Rescission (3rd Edition)Dominic O'Sullivan KC, Steven Elliott KC, Rafal Zakrzewski
This chapter examines Section 2(2) of the Misrepresentation Act 1967. As rescission is claimed for non-fraudulent misrepresentation, Section 2(2) of the Misrepresentation Act 1967 provide judges and arbitrators the discretionary power to declare the contract subsisting and award damages in lieu of rescission. The legislation had been introduced for instances wherein the situation of the defendant of rescission would be disproportionately hard compared to the injury suffered. The chapter then expounds on the conditions and grounds for the exercise of the power to award damages instead of rescission. It also looks into the measurement of damages. Additionally, courts have asserted an undoubted discretion to refuse rescission when it had been deemed disproportionate under the general law and requirements of the fair dealing rule.
Part II Grounds, 6 Duress and Undue Influence »
Dominic O’Sullivan
From: The Law of Rescission (3rd Edition)Dominic O'Sullivan KC, Steven Elliott KC, Rafal Zakrzewski
This chapter focuses on contract-related duress and improper influence. When a party's assent has been compromised by coercion or other forms of pressure, a contract may be revoked under the circumstances of duress and undue influence. The chapter details the distinctions between the two grounds for rescission: duress refers to the specific concept formed by common law courts regarding threats and demands, whereas undue influence abides by the general doctrine developed by the courts of Chancery concerning subtle influences. Cases involving duress or undue influence, however, do not necessarily mean the criminal was absolved of their legal obligations. Along with rescission, compensation is also available.
Part III Rescission By Election and By Court Order, 11 Electing to Rescind »
Dominic O’Sullivan
From: The Law of Rescission (3rd Edition)Dominic O'Sullivan KC, Steven Elliott KC, Rafal Zakrzewski
This chapter studies the process of electing to rescind. It starts with the validity of a voidable transaction until it is rescinded, especially since the party entitled to rescind would not be obliged. An election to disaffirm never results in a rescission, but proprietary rights to restitution are conferred when a transaction is rejected for fraud. As a general rule, rescinding election includes notifying the opposite party in the transaction of one's intent. Retaking possession of goods sold unambiguously asserts rights incompatible with a subsisting contract. The chapter also explains how an election to rescind could be achieved through pleading. When a transaction is voidable in equity, the election to rescind could only be effective under the conditions of fraud.
Part III Rescission By Election and By Court Order, 12 Extinction of the Contract »
Dominic O’Sullivan
From: The Law of Rescission (3rd Edition)Dominic O'Sullivan KC, Steven Elliott KC, Rafal Zakrzewski
This chapter studies situations when a contract comes to be set aside ab initio. It explains how a contract would be automatically extinguished as soon as the innocent party chooses to disaffirm it when a contract is voidable at common law. After the consideration of common law, the chapter looks at the position where a transaction could only be voidable in equity. While fraud primarily gives a right to rescind, it is the transaction’s rescission that provides a defence. The chapter then covers the practice of issuing injunctions in an effort to restrain action at law from becoming redundant after the Judicature reforms. It also looks into the discretion used to grant rescissions.
Part IV Restitutio in Integrum, 17 Financial Adjustments »
Dominic O’Sullivan
From: The Law of Rescission (3rd Edition)Dominic O'Sullivan KC, Steven Elliott KC, Rafal Zakrzewski
This chapter looks into financial allowances and adjustments made as an incident of the restoration of the parties to their original positions upon rescission. It clarifies that most types of allowances and adjustments are only available upon rescission in equity. Most of the time, the responsibility of proof will fall on the claiming party. Upon rescission, each party are mandated to account for the benefits upon gaining asset ownership. Benefits derived from land and chattels are some of the issues from restitution and counter-restitution that must be made upon rescission. The chapter then discusses joint acquisitions, interest, and indemnity to expound on restitution and counter-restitutions. It also considers the alteration of assets to impose compensation.
Part IV Restitutio in Integrum, 13 General Principles of Restitutio in Integrum »
Dominic O’Sullivan
From: The Law of Rescission (3rd Edition)Dominic O'Sullivan KC, Steven Elliott KC, Rafal Zakrzewski
This chapter discusses the general principles of restitutio in integrum. It highlights the basic objective of the relief given upon rescission, which is to restore the parties to their original positions or where rescission occurs in equity. Restitutio in integrum often refers to the object of an award of damages. Moreover, rescission can leave uncompensated losses and windfalls that would leave parties in a worse position financially than if the contract had never been made. The chapter then explains how discretion is needed to impose relief in equity. It looks at the retrospective consequences of rescissions that involve property rights and fiscal consequences.
Part VII Gifts and Deeds, 29 Gifts and Deeds »
Dominic O’Sullivan
From: The Law of Rescission (3rd Edition)Dominic O'Sullivan KC, Steven Elliott KC, Rafal Zakrzewski
This chapter discusses the right to rescind gifts and transactions effected by deed. It clarifies gifts as being more vulnerable to rescission, while a transaction effected by deed can be rescinded at common law, aside from instances of duress and equity. Gifts are divided into categories of donationes mortis causa, testamentary gifts, and gifts inter vivos. It is important to identify the principal context that impaired consent first before considering the right to rescind a gift. The chapter then explains the principles applicable to the cancellation of deeds. It looks at orders for delivery up and cancellation, which serve to protect the rescinding party and the public by either removing the instrument from the defendant’s possession or advertising its invalidity.
Part I Introduction, 3 Historical Foundations »
Dominic O’Sullivan
From: The Law of Rescission (3rd Edition)Dominic O'Sullivan KC, Steven Elliott KC, Rafal Zakrzewski
This chapter traces the historical foundations of the doctrines explaining the great divide between the shape of rescission at common law and in equity. The distinctive feature of rescission at law correlates with the groups of rules concerned with the title and the right to personal claims to restitution. The principles of rescission applicable to common law were shaped by the rules regulating the forms of actions available when a contract had been achieved through fraud. Thus, the rules help simultaneously explain the structure and limitations of rescission at law. The chapter then expounds on the effects of fraud on contracts and title. It also looks at the special case of insurance wherein the relationship between law and equity was considered.
Part V Third Parties, 20 Intervention of Third Party Rights »
Dominic O’Sullivan
From: The Law of Rescission (3rd Edition)Dominic O'Sullivan KC, Steven Elliott KC, Rafal Zakrzewski
This chapter examines the intervention and protection provided by third-party rights. It explains how rescission will not be barred if relief will be made in a way that does not affect the rights of innocent third parties. One of the main bars to rescission is the intervention of third-party rights, but only a few cases have invoked the bar successfully. The third-party rights bar corresponds to a small collection of cases decided by the common law courts involving the sales of goods produced by the purchaser’s fraud. A bar becomes unnecessary to the protection of the rights of innocent purchasers and recognizing it would only provide fraudulent purchasers protection.
Part II Grounds, 4 Misrepresentation »
Dominic O’Sullivan
From: The Law of Rescission (3rd Edition)Dominic O'Sullivan KC, Steven Elliott KC, Rafal Zakrzewski
This chapter looks into misrepresentation as grounds for rescission. It lists the elements needed to be entitled to a rescission of a contract via misrepresentation: relevant representation, known by the other part to the voidable contract, falsified, and relied upon by the representee. The types of misrepresentations range from fraudulent, negligent, and innocent, which revolve around the representor’s state of mind. The chapter highlights how representation should be made by the representor to the representee. It also considers the conditions for representations, such as existing facts and law, contractual terms, expressed and implied. Most commonly, silence does not invoke representation.
Part II Grounds, 7 Mistake, Impaired Capacity, and Unconscionable Bargains »
Dominic O’Sullivan
From: The Law of Rescission (3rd Edition)Dominic O'Sullivan KC, Steven Elliott KC, Rafal Zakrzewski
This chapter discusses mistakes, impaired capacity, and unconscionable bargains as grounds for rescission. It explains how the complainant cannot bargain to protect their interests if an impairment had been recorded. The counter-party’s knowledge of impairment would be relevant, as it would trigger unconscionable bargains and moral acceptability, but it does not always lead to a rescission of the case. While mistakes are not common grounds for rescission, the chapter looks into special doctrines of rescission for mistakes. It also lists mental infirmity and intoxication as examples of impaired capacity. Meanwhile, the unconscionable bargain is often associated with constructive fraud or exploitation.
Page:12
