Define 'rescission' in contract law.

In contract law, rescission refers to the cancellation of a contract with the goal of restoring the parties involved to their original positions prior to the agreement. This means that when a contract is rescinded, any benefits exchanged as part of the agreement must be returned, effectively nullifying the contract as if it never existed. This remedy is often pursued in circumstances where there has been a misrepresentation, undue influence, fraud, or a mutual mistake, among other situations, creating an unfair agreement.

Understanding rescission is vital for recognizing how parties can seek relief when a contract becomes untenable due to circumstances surrounding its formation or execution. In contrast, simply enforcing a contract to completion relates to upholding and executing the contract as it stands, while modifying contract terms pertains to altering the existing agreement rather than nullifying it. The negotiation of alternate contract terms refers to discussions aimed at changing specific elements of a contract, rather than canceling the entire contract. Thus, the primary focus of rescission is on cancellation and restoration.