How Do You Rescind A Contract?

Published on December 24, 2025

Rescinding a contract means canceling it and returning both parties to their original positions before the agreement was made. It’s similar to pressing an “undo” button on the contract. But you can’t rescind a contract simply because you changed your mind: you need valid legal grounds.

Valid Grounds For Rescission

Misrepresentation: If someone lied or provided false information that convinced you to sign the contract, you may be able to rescind it. For example, if a seller told you a property had no structural issues when they knew the foundation was cracked, that’s misrepresentation.

Fraud: This goes beyond simple misrepresentation; it involves deliberate dishonesty with the intent to deceive you.

Duress: If you were forced or threatened into signing a contract, it can be rescinded. Duress means you didn’t enter the agreement voluntarily because of factors such as threats, violence, or extreme pressure.

Undue Influence: When someone in a position of power over you uses that influence to get you to sign the agreement.

Mistake: In limited circumstances, a fundamental mistake about the contract’s subject matter can justify rescission.

Unconscionability: If a contract is so one-sided and unfair that it shocks the conscience of the court, rescission may be warranted.

When You Can't Rescind

You lose the right to rescind in certain situations. If you’ve already affirmed the contract after discovering the problem, rescission isn’t available. Taking benefits from the contract while knowing about issues that would justify rescission may count as affirmation.

If too much time has passed since you discovered the grounds for rescission, courts may decide you’ve lost the right. The law expects you to act reasonably quickly.

Contact Pinto Shekib LLP, Your Toronto Contract Litigation Lawyers

Courts have discretion in granting rescission. Even with valid grounds, a judge might deny it if rescission would be unfair or impractical under the circumstances.

Trying to rescind a contract without proper legal guidance can backfire. You might lose your right to rescind by acting incorrectly, or you might face a lawsuit for breach of contract.