Which remedy is sought when one party fails to perform and the non-breaching party asks the court to cancel the contract and restore the parties to their original positions?

• A. Suit for damages
• B. Breach of contract
• C. Suit for cancellation (rescission)
• D. Suit for specific performance

Answer: (C)

The key idea is selecting the remedy that undoes the contract and puts both parties back where they were before agreement. When one party doesn’t perform and the non-breaching party wants to cancel the deal, the contract is treated as if it never existed. This is rescission. It unwinds the contract and ordinarily requires both sides to return any benefits or money exchanged, so the parties return to their pre-contract positions.

This differs from damages, which seeks monetary compensation for losses caused by the breach, rather than canceling the contract. It also differs from specific performance, which would compel the breaching party to fulfill the contract terms rather than undo the agreement. And “breach of contract” describes the violation itself, not a remedy. So the best choice is rescision, the remedy that cancels the contract and restores the original positions.