Introductory Business Law CLEP Prep Practice Exam

According to contract law, when can the court use the doctrine of rescission?

1. When the agreement is breached

2. When the agreement is executed

3. When the agreement is unconscionable

4. When the agreement is ambiguous

The correct answer is: When the agreement is unconscionable

The doctrine of rescission is a legal remedy that allows the court to invalidate a contract and return the parties to their pre-contractual positions. In order for the court to exercise this remedy, the agreement must be deemed unconscionable, meaning that it is grossly unfair or oppressive and takes advantage of one party's vulnerability. This option is the most appropriate because unlike the other options, it directly relates to the use of the doctrine of rescission in contract law. Option A refers to a potential consequence of the court's use of the doctrine, not the actual use itself. Option B refers to the completion of a contract, not the rescission of one. Option D focuses on the language or interpretation of the agreement, not the fairness or legality of its terms. Therefore, only option C accurately describes when the court can use the doctrine of rescission.