rescission, the claimant must be able to give back to the defendant any benefits conferred on him under the contract. Without this return to the pre-contract position, the claimant himself would be unjustly enriched by granting rescission of the contract. The most likely event preventing restitutio in integrum involves consumption or disposal of the subject matter of the contract. Thus, if the thing which the claimant seeks to restore is radically different from the thing contracted, rescission will not be allowed. In Clarke v Dickson, the plaintiff purchased shares in a company from the defendants. Subsequently, with the consent of the plaintiff, the company was reorganised as one with limited liability. When that limited liability company was wound up, the plaintiff discovered that the defendants had been guilty of a misrepresentation and he sought to rescind his contract with the defendants in order to recover the purchase price. However, what he proposed to return to the defendants would have been different in kind to that which was contracted for. Accordingly, rescission was not granted: Clarke v Dickson (1858) EB & E 148, p 154; 120 ER 463

doi:10.4324/9781843141518-286

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rescission, the claimant must be able to give back to the defendant any benefits conferred on him under the contract. Without this return to the pre-contract position, the claimant himself would be unjustly enriched by granting rescission of the contract. The most likely event preventing restitutio in integrum involves consumption or disposal of the subject matter of the contract. Thus, if the thing which the claimant seeks to restore is radically different from the thing contracted, rescission will not be allowed. In Clarke v Dickson, the plaintiff purchased shares in a company from the defendants. Subsequently, with the consent of the plaintiff, the company was reorganised as one with limited liability. When that limited liability company was wound up, the plaintiff discovered that the defendants had been guilty of a misrepresentation and he sought to rescind his contract with the defendants in order to recover the purchase price. However, what he proposed to return to the defendants would have been different in kind to that which was contracted for. Accordingly, rescission was not granted: Clarke v Dickson (1858) EB & E 148, p 154; 120 ER 463

ABSTRACT

Clarke v Dickson (1858) EB & E 148, p 154; 120 ER 463 Crompton J: When once it is settled that a contract induced by fraud is not void, but voidable at the option of the party defrauded, it seems to me to follow that, when that party exercises his option to rescind the contract, he must be in a state to rescind; that is, he must be in such a situation as to be able to put the parties into their original state before the contract. Now here I will assume, what is not clear to me, that the plaintiff bought his shares from the defendants and not from the company, and that be might at one time have had a right to restore the shares to the defendants if he could, and demand the price from them. But then what did he buy? Shares in a partnership with others. He cannot return those; he has become bound to those others. Still stronger, he has changed their nature: what he now has and offers to restore are shares in a quasi-corporation now in process of being wound up. That is quite enough to decide this case. The plaintiff must rescind in toto or not at all; he cannot both keep the shares and recover the whole price. That is founded on the plainest principles of justice. If he cannot return the article he must keep it, and sue for his real damage in an action on the deceit. Take the case I put in the argument, of a butcher buying live cattle, killing them, and even selling the meat to his customers. If the rule of law were as the plaintiff contends, that butcher might, upon discovering a fraud on the part of the grazier who sold him the cattle, rescind the contract and get back the whole price: but how could that be consistently with justice? The true doctrine is, that a party can never repudiate a contract after, by his own act, it has become out of his power to restore the parties to their original condition.