ABSTRACT
Rescission The right to rescission of the contract exists independently of any statute. There are particular reasons to refuse rescission which are known as ‘bars to rescission’. If any bar is present it will prevent rescission from being an available remedy for misrepresentation. The three most significant bars are: (a) where restitution is impossible, for example, because the buyer has consumed the goods; (b) because the buyer has delayed for more than a reasonable length of time before attempting to rescind the contract; and (c) because a third party acting in good faith has already bought the goods (see s 23 of the Sale of Goods Act 1979, on p 24). In the case of a fraudulent misrepresentation (a common law remedy), the reasonable length of time does not start until the buyer has become aware of the misrepresentation. In the case, however, of other forms of misrepresentation rescission is an equitable remedy whether innocent or negligent under s 2(1)), thus time begins to run when the contract is made (Leaf v International Picture Galleries [1950]). By virtue of s 2(2) of the Misrepresentation Act 1967, the court has the discretion to refuse to grant rescission and to award damages instead. Section 2(2) does not apply where the misrepresentation was made fraudulently. Neither may s 2(2) be used if there are any existing equitable bars to the grant of rescission.
