Rescission and Compensatory Damages

Rescission. Rescission means canceling the contract and treating it as though it never existed. When a contract is rescinded, both parties are returned to their original positions and released from their contractual obligations. Any earnest money or payments made must be returned to the buyer.Compensatory Damages. A party harmed by a breach may also sue for monetary damages equal to the loss suffered. These are called compensatory damages. In some cases, a buyer may choose to accept the property despite a misrepresentation and still seek damages. Alternatively, the buyer may reject the property and pursue compensation for the loss.