Laws, Regulations & Annotations

C

220.0000 CHANGE IN OWNERSHIP

Annotation 220.0602

220.0602 Rescission—Motive. Civil Code section 1688 provides that a contract is extinguished by its rescission. A contract may be rescinded mutually if all the parties consent, or unilaterally based on a variety of grounds, for example, fraud, mistake or duress (Civil Code section 1689). Civil Code section 1691 explicitly requires the restoration of the parties to the status quo for unilateral rescission. Although the Civil Code contains no similar explicit requirement for mutual rescission, case law is supportive of a requirement to return the parties to the status quo for mutual rescission. The Civil Code does not require a court order to validate a rescission. Because the elements of a valid rescission are clearly specified in the Civil Code, if the parties to a contract to transfer real property satisfy the statutory requirements, the assessor must accept such rescission for property tax purposes. If, for example, all parties to a transfer of property wish to undo the transfer and have restored to each other all consideration received, the assessor must accept the rescission of the property transfer. The motive for rescinding a contract is inconsequential to its validity. However, if the parties to a contract to transfer real property fail to meet a requirement for rescission provided in the Civil Code, the assessor has the discretion to deny the rescission for property tax purposes. C 12/10/2015.