Rescission of Contract in Singapore: What You Need to Know
In Singapore, rescission of contract refers to the termination of an agreement between two parties. It can be initiated by either party, and may happen for a variety of reasons. But what exactly does rescission of contract entail, and when is it necessary? Here`s what you need to know.
What is Rescission of Contract?
Rescission of contract is a legal term that refers to the cancellation or termination of a contract due to a breach of the agreement. When a contract is rescinded, it is as if the contract never existed, and both parties are released from their obligations and responsibilities under the contract.
Under Singapore law, there are several grounds for rescission of contract. For instance, a contract may be rescinded if one party makes a false representation, or if one party is coerced into signing the agreement. Additionally, a contract may be rescinded if one party breaches the terms of the contract.
When is Rescission of Contract necessary?
Rescission of contract is necessary when there has been a breach of the agreement, or when one party has engaged in fraudulent behavior. For example, if one party misrepresented their financial standing in order to secure a loan, the other party may be entitled to rescind the contract and seek damages.
Similarly, if one party breaches the terms of the contract, such as failing to deliver goods or services as promised, the other party may be entitled to rescind the contract and seek compensation. In some cases, the parties may simply agree to rescind the contract voluntarily if it is no longer beneficial to either party.
How is Rescission of Contract enforced in Singapore?
Rescission of contract is a legal matter, and must be enforced through the legal system in Singapore. The party seeking rescission must file a lawsuit and prove the grounds for rescission in court. If the court finds that the grounds for rescission are valid, it can order the contract to be rescinded and award damages to the party seeking relief.
In some cases, the parties may choose to pursue alternative dispute resolution methods such as mediation or arbitration to resolve the matter outside of court. However, if these methods are unsuccessful, the matter may ultimately need to be decided by a judge.
Conclusion
Rescission of contract is an important legal concept in Singapore, and can be used to protect parties from fraudulent behavior or breaches of contract. Parties who believe they may be entitled to rescind a contract should consult with a qualified legal professional to discuss their legal options and determine the best course of action.