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Rescission

To rescind a contract is to cancel it by each person involved giving back whatever it is they received from the other person or people involved (this is called making restitution).  If this is done, it is as if the contract never existed in the first place.

For example, suppose you buy a boat from a boat dealer.  You have a contract with the dealer in that you gave him money for the boat.  But if you decide you don't want the boat and you return it to the dealer and he gives you your money back, the contract has, in effect, been rescinded.