Property 29

Question 1

What is rescission?

Answer 1

Rescission is a remedy whereby the original contract is considered voidable and rescinded. The parties are left as though a contract had never been made.

Question 2

What are the grounds for rescission?

Answer 2

1. Mutual mistake of a material fact;
2. Unilateral mistake if the other party knew or should have known of the mistake;
3. Unilateral mistake if hardship by the mistaken party is so extreme it outweighs the other party’s expectations under the contract;
4. Misrepresentation of fact or law by either party as to a material factor in the negotiations that was relied upon; and
5. Other grounds such as duress, undue influence, illegality, lack of capacity, and failure of consideration.

Question 3

Are equitable defenses, such as laches and unclean hands, available in a rescission action?

Answer 3

Yes.

Question 4

Is the plaintiff’s negligence a defense to rescission?

Answer 4

No.

Question 5

At common law, do contracts of sale and deeds of real property carry implied warranties of quality of fitness for the purpose intended?

Answer 5

No.

Question 6

Can the seller of existing land and buildings (not new construction) be liable to the purchaser for defects in the improvements?

Answer 6

Yes, on several different theories.

Question 7

Misrepresentation or fraud.

Answer 7

Requires proof that:

1. The seller knowingly made a false statement of fact (oral or written) to the buyer;
2. With intent to induce reliance on the misrepresentation;
3. the buyer justifiably relied on the statement; and
4. the misrepresentation materially affected the value of the property.

Question 8

Active concealment

Answer 8

Under this theory, the seller is liable, even without making any statement, if the seller took steps to conceal a defect in the property.

Question 9

Failure to disclose.

Answer 9

The Florida Supreme Court has held that a seller of new or used residential real property has an affirmative duty to disclose facts materially affecting the value of the property that are not readily observable or known to a purchaser.