ABSTRACT
The purpose of this chapter is to examine the rationale for requiring a plaintiff to elect to rescind a contract as a precondition to claiming the restitution of money paid under the contract. It is well known that the term ‘rescission’ is one of the most ambiguous in the law.1 One type, known variously as ‘classical’ rescission, rescission ‘ab initio’ or retrospective rescission, sets aside a contract or gift which has been procured by some wrongdoing, such as mistake, misrepresentation, equitable fraud, breach of fiduciary duty, undue influence or unconscionable conduct.2 The purpose of this type of rescission is to restore both parties to their precontractual financial position. No question of restoring property will of course arise if the contract is wholly executory. Under a partially or wholly executed contract the process of returning property, and of making allowances for depreciation of property or for services performed, must be effected either by the parties themselves exercising a form of ‘mutual self-help’ or by court order. If it is a contract that is being rescinded, equitable orthodoxy, at least in AngloAustralian jurisdictions, requires a plaintiff to elect to rescind the contract as a prerequisite to the return of money paid or property transferred under the contract.3 The orthodoxy was applied by the Full Court of the Supreme Court of Western Australia in the recent decision of Hancock Family Memorial Foundation v Porteous.4 The judgment of the Full Court conveniently summarises the various justifications put forward at different times for the election requirement, and therefore provides an opportunity for reassessing their cogency.
