A more thorough explanation:

Definition: To cancel or undo a contract, putting the parties back in the same position they were in before the contract was made.

Parties can rescind a contract by mutual agreement or through their conduct and circumstances. For example, if two parties agree to cancel a contract and make a new one, the old contract is rescinded. Alternatively, if the parties act in a way that shows they no longer intend to be bound by the contract, such as returning goods or not making payments, the contract may be rescinded.

In some cases, a party can rescind a contract without the other party's consent. This is called unilateral rescission and is only allowed in certain situations, such as when one party was forced to agree to the contract or when the contract is illegal. However, courts are often hesitant to allow unilateral rescission and may only grant it if damages are not enough to remedy the situation.

Example: Two people sign a contract for one person to sell their car to the other for $10,000. However, after signing the contract, the buyer discovers that the car has serious mechanical problems that were not disclosed. The buyer can ask the seller to rescind the contract and return the money, or the buyer can seek unilateral rescission if the seller refuses.

Example: A company signs a contract with a vendor to provide goods for a year. However, after a few months, the company discovers that the vendor is not delivering the goods on time and is charging more than agreed. The company can rescind the contract and find a new vendor, or seek unilateral rescission if the vendor refuses to cancel the contract.

Example: A person signs a contract to rent an apartment for a year. However, after moving in, they discover that the apartment has serious problems, such as mold or pests, that were not disclosed. The person can ask the landlord to rescind the contract and return the rent, or seek unilateral rescission if the landlord refuses.