Final answer:
Rescission is a legal term referring to the termination of a contract as if it never existed, often a remedy for issues like misrepresentation or fraud, which restores all parties to their original status.
Step-by-step explanation:
Rescission is the termination of a contract from the beginning as if it never existed. This legal term refers to the undoing of a contract between parties. Rescission can be a remedy for misrepresentation, mistake, coercion, undue influence, fraud, or when the contract is deemed voidable.
If a contract is rescinded, both parties are restored to their original positions before the transaction, as if the contract had never occurred. For instance, if one party misrepresented the condition of an item sold, the buyer may seek rescission, which would return the parties to their pre-contract status, including the return of any exchanged goods or funds.