What is Rescission?
Rescission is an equitable remedy. It renders a contract or similar transaction unenforceable and rewinds the parties’ position to before the transaction was entered.
When is Rescission Available?
Rescission is usually only granted if it possible to restore the parties to their original, pre-transaction position. This is known as the principle of restitutio in integrum.
Since a person who comes to equity must do equity, the claimant must be willing to give back any benefits received under the transaction.
When is Rescission Unavailable?
Rescission is a discretionary remedy, and can be refused on a variety of grounds.
Rescission will normally be refused if restitutio in integrum is impossible: Clarke v Dickson (1858) EB & E 148. There is an exception for breaches of fiduciary duty, where rescission may be ordered even if restoration is impossible: Elanger v New Sombrero Phosphate (1878) 3 App Cas 1218.
If the claimant, with full knowledge of the breach which makes the transaction voidable, communicates to the other party that the transaction is still valid, or behaves as if it is still valid, the right to rescind is lost: Sharpley v Louth  2 Ch D 663.