Contracts
In New Mexico, what is the difference between rescission and cancellation of a purchase contract?
AThey are identical
BRescission returns parties to their pre-contract position; cancellation terminates the contract going forward✓ Correct
CRescission requires court approval; cancellation does not
DCancellation returns parties to pre-contract; rescission terminates going forward
Explanation
Rescission restores parties to their original position as if the contract never existed (refund of deposits, return of consideration). Cancellation simply terminates the contract prospectively without reversing prior performance.
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