Rescission Remedy Breach of Contract South Carolina
Rescission is an "abrogation or undoing of a contract from the beginning, which seeks to create a situation the same as if no contract ever had existed." Government Employees Ins. Co. v. Chavis, 254 S.C. 507, 516, 176 S.E.2d 131, 135 (1970).
In First Equity Investment Corp. v. United Service Corp., 299 S.C. 491, 386 S.E.2d 245 (1989), a mortgagor brought an action against a mortgagee, alleging breach of contract accompanied by a fraudulent act and seeking the remedy of rescission.
The Supreme Court explained:
When a party elects and is granted rescission as a remedy, he is entitled to be returned to status quo ante. Kent Homes, Inc. v. Frankel, 128 A.2d 444, 446 (D.C. Ct. App. 1957).
Rescission entitles the party to a return of the consideration paid as well as any additional sums necessary to restore him to the position occupied prior to the making of the contract. Bank of Johnson v. Jones, 141 S.C. 98, 115-116, 139 S.E. 190, 196 (1927); Baeza v. Robert E. Lee Chrysler, Plymouth, 279 S.C. 468, 472-473, 309 S.E.2d 763, 766 (Ct. App. 1983); Jennings v. Lee, 105 Ariz. 167, 461 P.2d 161, 167 (Ariz. 1969).
First Equity Investment Corp., 299 S.C. at 496-97, 386 S.E.2d at 248. Rescission, as a remedy, returns the parties to the status quo ante. Government Employees Ins. Co., supra.
A return to the status quo ante necessarily requires any party damaged to be compensated. See Ebner v. Haverty Furniture Co., 128 S.C. 151, 122 S.E. 578 (1924) (remedy of rescission is insufficient if parties cannot be returned to status quo ante).