Final answer:
Meals Catering can rescind the contract due to Lunch Trucks, Inc.'s failure to perform and can also obtain restitution by recovering the $5,000 paid in advance. Rescission returns both parties to their initial positions, and restitution involves the recovery of any benefits conferred under the contract.
Step-by-step explanation:
Can Meals Catering rescind the contract and obtain restitution?
Meals Catering can seek to rescind the contract with Lunch Trucks, Inc. because Lunch Trucks failed to perform its contractual obligations. To rescind a contract means to cancel or terminate the contract, effectively returning both parties to their pre-contractual positions. This is a legal remedy used when a breach of contract occurs.
Regarding restitution, Meals Catering can also seek restitution as a remedy. Restitution involves returning the injured party to the position they were in before the contract was executed. In this case, Meals Catering would seek the return of the $5,000 paid in advance since the service was not performed as agreed.
How to Rescind a Contract and Obtain Restitution
To rescind a contract, the party seeking rescission (Meals Catering) must inform the other party (Lunch Trucks) that they are rescinding the contract due to breach. Legal action might be necessary if the breaching party does not agree to the rescission. As for the process of obtaining restitution, the non-breaching party can demand the return of what was given under the contract (the $5,000) or, if necessary, take legal action to recover the amount.