Rescission is a legal term that refers to the cancellation of a contract, returning both parties to their original positions before the agreement was made. This process can occur when a contract is deemed invalid due to reasons such as misrepresentation, fraud, or mutual mistake. In a rescission, the parties involved may need to return any benefits received under the contract, such as money or property. This ensures that neither party is unfairly enriched at the expense of the other. Rescission can be initiated by either party, depending on the circumstances surrounding the contract.