Rescinding a Florida real estate contract means that the contract is cancelled, and it is as if no contract existed. In law, a rescinded contract is a contract that has “no force and effect from the beginning.” Borck v. Holewinski, 459 So.2d 405, 405 (Fla. 4th DCA 1984).
Mutual rescission – Buyer and seller may consent to rescission without litigation.
Unilateral rescission – If buyer and seller do not agree to rescind a contract, then one of the parties may have grounds for rescission.
Some examples of reasons a buyer or seller can rescind a contract include the inability to meet a contingency, (e.g., the inability obtain financing when there is a mortgage contingency), force majeure, fraud, mistake, duress, and title defects that cannot be cured.
If a lawsuit is filed seeking rescission, then the remedy of rescission must be specifically requested. Because recission is cancelling a contract as if no contract existed, recission is inconsistent with other remedies that rely on there being an active contract, such as, breach of contract, fraud, or specific performance, which all affirm the contract. Thus, in a lawsuit you cannot sue to rescind a contract and at the same time sue for breach of contract.
If a judge issues an Order rescinding the contract, then the goal is that the parties would be returned to the same position they were in prior to entering the contract. Courts will only rescind a contract if it is fair to both sides. In other words, neither party should suffer a loss because of the rescission. For instance, if a buyer had to make an escrow deposit and the contract is rescinded, then the escrow deposit would be returned to the buyer.
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