When the parties to a contract put themselves back into the same positions they were in before they entered into the contract, the contract has been:

• A. Terminated by operation of law.
• B. Enforced
• C. Rescinded
• D. Voided

Answer: (C)

Rescission occurs when the contract is undone and the parties are restored to the positions they occupied before they entered into the agreement. If both sides place themselves back in their pre-contract state, the deal is treated as if it never happened, with any exchanged consideration returned as needed. This is distinct from termination by operation of law, which ends obligations due to a legal event but doesn’t necessarily undo the exchange to return everyone to their exact pre-contract status. It’s also different from enforcing the contract (carrying out its terms) and from voiding (taking the agreement as invalid from the start). In real estate, rescission is the remedy that effectively cancels the contract and restores the original positions of the parties.