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Rescission vs. Termination: What's the Difference?

Edited by Aimie Carlson || By Janet White || Updated on November 13, 2023
Rescission is the act of revoking, canceling, or repealing a contract, making it null and void; termination refers to bringing an agreement or process to an end.

Key Differences

Rescission involves legally undoing a contract as if it never existed, typically due to misrepresentation, fraud, or mutual mistake. Termination, on the other hand, signifies the conclusion of a contract's validity or an agreement, possibly due to the fulfillment of terms or an expiry date.
In rescission, all parties are restored to their original positions prior to the contract, nullifying any effects of the agreement. Termination might not necessarily undo previous effects but stops the contract from continuing further.
The process of rescission can be complex, often requiring legal intervention or mutual consent, and aims to address unfair or erroneous contracts. Termination can be simpler, occurring naturally at the end of a contract's term or through mutual agreement.
Rescission is often used in cases of contract disputes or legal inconsistencies, focusing on fairness and rectifying errors. Termination is a more general concept, applicable in various situations like employment, services, or lease agreements, often without implying fault.
Rescission can have legal implications, potentially involving restitution or compensation. Termination, while it may involve certain final obligations, typically does not entail reversing actions or compensations to the state prior to the agreement.

Comparison Chart


Undoing a contract as if it never existed
Bringing a contract or agreement to an end


To address errors, misrepresentation, or fraud
To conclude an agreement, often after terms are met


Restores parties to pre-contract status
Ends ongoing obligations but doesn’t reverse past actions


Often in legal contexts to rectify contract issues
In various contexts like employment, services, agreements

Legal Implications

May involve restitution or legal action
Typically involves fulfilling final obligations

Rescission and Termination Definitions


Revocation of an agreement.
Rescission of the deal occurred after discovering the error.


Concluding an employment agreement.
His employment saw termination due to restructuring.


Legal undoing of a contract.
The contract’s rescission was due to fraudulent terms.


End of a contract's validity.
The contract’s termination was on its expiry date.


Nullifying a legal contract.
The court ordered a rescission of the partnership.


Bringing a lease to an end.
The lease’s termination occurred after one year.


Cancellation due to misrepresentation.
Misleading information led to the contract’s rescission.


Ending a service agreement.
Termination of the service contract was mutually agreed upon.


The act of rescinding.


Stopping an ongoing process.
The project faced termination due to funding cuts.


(Law) The termination of a contract by mutual agreement or as a result of fraud or some legal defect.


The act of terminating or the condition of being terminated.


An act of rescinding: removing, taking away, or taking back.


The end of something in time; the conclusion.


(legal) The undoing of a contract; repeal.


An end of something in space; a limit or edge.


The act of rescinding, abrogating, annulling, or vacating; as, the rescission of a law, decree, or judgment.


(law) the act of rescinding; the cancellation of a contract and the return of the parties to the positions they would have had if the contract had not been made; recission may be brought about by decree or by mutual consent


Repealing an erroneous agreement.
They agreed to the rescission of the faulty agreement.


What is contract termination?

It's the process of ending the validity of a contract.

What does rescission mean in legal terms?

It means legally undoing a contract, making it void.

Is termination common in business contracts?

Yes, termination is a common aspect of business contracts.

Can rescission happen in employment contracts?

Yes, if there's misrepresentation or fraud in the employment contract.

Does termination imply fault?

Not necessarily, termination can occur for various reasons.

What leads to the termination of an agreement?

Expiry, fulfillment of terms, or mutual decision can lead to termination.

What are the effects of rescission?

It nullifies the contract and restores parties to pre-contract status.

Does termination require a notice period?

It depends on the contract's terms and conditions.

Can rescission occur without a legal process?

Usually, rescission involves legal steps or mutual consent.

Is rescission the same as cancellation?

Rescission is a form of cancellation but with legal implications to make a contract void.

Can termination be temporary?

Generally, termination is permanent, but some contracts may allow renewal.

Can rescission be partial?

Typically, it involves the entire contract, not parts of it.

Are rescission and annulment the same?

Similar, but annulment may have more specific legal connotations.

How is termination communicated?

Through written notice, as per contractual agreements.

Are there restitution requirements in rescission?

Often, especially if one party has incurred losses.

What happens after the termination of a lease?

The tenant must vacate the property, and final obligations are settled.

Is mutual agreement needed for rescission?

Not always, courts can order rescission unilaterally.

Does termination always involve legal action?

Not always, it can be a natural or mutual end of an agreement.

What’s required for a contract's rescission?

Proof of error, misrepresentation, or mutual consent.

Can employment be terminated without cause?

It depends on the employment laws and the contract terms.
About Author
Written by
Janet White
Janet White has been an esteemed writer and blogger for Difference Wiki. Holding a Master's degree in Science and Medical Journalism from the prestigious Boston University, she has consistently demonstrated her expertise and passion for her field. When she's not immersed in her work, Janet relishes her time exercising, delving into a good book, and cherishing moments with friends and family.
Edited by
Aimie Carlson
Aimie Carlson, holding a master's degree in English literature, is a fervent English language enthusiast. She lends her writing talents to Difference Wiki, a prominent website that specializes in comparisons, offering readers insightful analyses that both captivate and inform.

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