40 RESCISSION. 



contract in accordance with the real intention of the 

 parties, but will reduce it, subject, it ma}^ be, to conditions 

 as to restitution and recompense, (a) In the absence of 

 essential error, the defrauded party can only get the sale 

 rescinded provided there be these three requisites (6) : — 



(1.) That he can put the other party in the same position 

 he was in before the transaction. Thus, if a horse have 

 perished, the contract for its sale cannot be rescinded, but 

 relief may be had in damages, (c) 



(2.) That no third party has, in good faith, and for value, 

 acquired rights under the contract. (c) But third parties 

 having acquired rights gratuitously, or wath notice of the 

 fraud, cannot take benefit from a fraudulent transaction, (rf) 

 and under notice is included knowledge of all facts and cir- 

 cumstances as ought to have made them inquire into the 

 author's title, (e) 



(3.) That the wrong-doer's position is not materially 

 altered by delay in challenging the contract. In the case of 

 breach of the contract of sale, however, where there is fraud on 

 the part of the seller, the purchaser is entitled, at his option, 

 either to set aside the contract altogether, or demand such 

 damages as he may have sustained through the fraudulent 

 misrepresentation of the seller. (/) But, except there be 

 fraud, he cannot both retain the horse and claim an abate- 

 ment of the price ; his remedy being to return it at once, 

 and claim damages for breach of contract, {g) 



(a) Geddes v. Pennington, 1814, 17 F.C. 606, afif. 1817, 5 Dow, 159. 

 {b) B. Pr. 13 A. 

 (c) § 20. 



(c/) Wardlaw v, Mackenzie, 1859, 21 D. 940. 

 (e) Cook V. Eshdhy, 1887, 12 App. Ca. 271. 



(/) Amaan v. Handyside, 1865, 3 M. 526 ; Dohbie v. Duncanson, 1872, 10 

 M. 810. 

 (fj) M'Cormick v. Rittmcyer, 1869, 7 M. 854. 



