Notice of Rescission
When two parties who entered in a contract or agreement previously want to terminate the agreement and go back to the point before signing the contract, they can rescind the agreement. When an agreement is being rescinded, both the parties are informed by the notice of rescission. The key purpose of rescinding an agreement is to make things the way they were before the parties signed the agreement. The parties can rescind the contract by themselves with mutual agreement, file a case in the court and let the judge rescind the agreement or hire a rescission firm for settlement. In either case, both the parties are informed formally with the notice of rescission. In this notice, the most important element is the date from which the rescission is effective which can be the date each party receives the notice or some other date in the future.
Key Elements to include in Notice of Rescission:
- Name of the first party who signed the agreement with complete address
- Name of the second party who signed the agreement with complete address
- Date when the notice of rescission is being sent to both parties
- Reference and details of the agreement the parties signed earlier
- Reasons of rescinding the agreement (if applicable)
- Date when the agreement was rescinded
- Specific way the agreement was rescinded i.e. by judge, by mutual agreement of parties or settlement by a third party i.e. settlement firm
- Effective date of the notice i.e. upon receive by the parties or another date in future
- Signature of both the parties or mediator and witnesses
Three ways a Contract can be Rescinded:
- By mutual consideration and agreement:
If the agreement signed between the parties isn’t very important and if they terminate it, it won’t affect other people, the parties can rescind the agreement by sitting together and finding mutual ground for the settlement. In this process, they don’t need to include any legal help but for their own sake, they can introduce their personal settlement officers to talk and settle on their behalf.
- By filing a case in local court:
If both the parties realize that they can’t rescind the agreement with mutual consideration or either party is not cooperating with the other one, they can file a case in the local court and let judge take charge and decide the rescission. Although this is a long process and it can take time from few weeks to months but there is a surety that the agreement will definitely be rescinded by the court.
By including a third party (mediator):
If the parties don’t want to rescind the agreement by mutual consideration or by involving court in the matter, they can hire a third party or a mediator who will listen to their statements and decide either in favor of rescission or against it and both the parties agree not to object the final decision made by the mediator.
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