California IDEX Practice Exam

What is rescission in the context of a contract?

1. Final approval of work

2. Adjustment to project scope

3. Contract termination

4. Revision of design concept

The correct answer is: Contract termination

Rescission refers to the legal remedy that allows for the termination of a contract and annuls the parties' obligations under that contract. This can occur for several reasons, including misrepresentation, fraud, undue influence, or mutual agreement between the parties. When a contract is rescinded, it is as though the contract never existed, and both parties are returned to their positions prior to the contract. The other options do not align with the definition of rescission. Final approval of work indicates acceptance of the contractual obligations rather than nullifying them. An adjustment to the project scope involves modifications to the terms without ending the agreement. Similarly, a revision of the design concept suggests changes to the project while still maintaining the current contract, rather than canceling it altogether.