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Rescission Rejected Where Plaintiff Sought Breach of Contract Claim as Well

Jun 3, 2024Litigation & Dispute Resolution

As I have explained, the cause of action for fraud affords a host of powerful remedies to the victims of fraudulent conduct. See, e.g., What Do Fraud and Spiderman Have in Common? With Great Power Comes Great Responsibilities. One of those remedies is to rescind an entire contract if it was induced by fraud. The remedy of rescission, however, is not without some hooks and catches. Rescission comes with its own special legal baggage.

One such catch is that the right to a jury trial of the claim may be lost if rescission is sought because rescission is an “equitable” remedy for which a jury trial is not traditionally allowed. See, e.g., When Can Fraud Claims and Jury Trials Coexist?

Another hook is that a party seeking to rescind a contract cannot also try to enforce the very same contract at the same time to obtain remedies for breach of that contract.

A new decision of the Appellate Division, First Department, makes that point rather bluntly: JTED46, Inc. v Espresso Dream, LLC, 2024 NY Slip Op 02986 (1st Dep’t Decided May 30, 2024).

Read the full blog post here.