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How To Get Out Of A Contract
Getting Out of a Contract
In Georgia, contract rescission (termination) has been held to be the complete abrogation (abolishment or cancellation) of a contract. The circumstances which allow parties to rescind a contract, generally, involve three (4) situations:
1. Both parties agree to rescind the contract, known as “mutual assent”;
2. The contract is rescinded because of fraud; or
3. A party (you) may be allowed to rescind a contract because the opposite party failed to perform in accordance with the contract terms;
4. If the contract was made with a minor (someone under the age of 18).
If you are able to rescind your contract, it will be rescinded “at law” or “in equity.” Rescission “at law” applies to situations involving fraud, while rescission “in equity” involves the power of a court of equity to “undo” a contract.
We are often confronted with situations where a person wants to undo a contract because of fraud. If your claim is that someone fraudulently induced you to enter a contract, you have the option to either affirm the contract or sue in breach of contract. What is important for you to know is that in these types of cases Georgia courts require the defrauded party, you, to act with “promptness.” That means:
1. When you discover that you have been defrauded, you must act promptly to “restore or offer to restore to the party that you allege defrauded you, whatever he has received by virtue of the contract if it is of any value”; and
2. Upon discovery of the facts–that you have been a victim of fraud—immediately announce your intention to rescind the contract, and adhere to it.
Again, once you discover that you have been defrauded and take the position that you do not want to stick to the contract, you should not change from that position. If you do change, and your action is interpreted as “affirming” the contract, despite the fact that you are claiming fraud, you will significantly impair your ability to rescind the contract later.
Also, if you do not act promptly upon discovering the alleged fraudulent conduct, but instead proceed with fulfilling certain obligations of the contract, or act in a manner inconsistent with your previous repudiation of the contract, a Georgia court may find that complaining about fraud during litigation is too late.
A minor who is a party to a contract has the right to rescind such contract up until he/she reached the age of 18. On reaching the age of 18, he/she may ratify the contract.
There are more issues involved in contract termination, especially those involving claims of fraud. You need a good lawyer who understands the law and its nuances and how to apply that law to the facts of your case, in order to maximize your position both at trial and the negotiating table.
We recommend that you contact a good lawyer, immediately, once you realize or think you have been defrauded with respect to a contract.
Contact the Okeke Law Firm, P.C. @ 404-403-4487, for more information on your rights under Georgia contract law.