Gale Encyclopedia Of American Law 3Rd Edition Volume 8 P37 pot

REPUDIATION The rejection or refusal of a duty, relation, right, or privilege. Repudiation of a contract means a refusal to perform the duty or obligation owed to the other party. ANTICIPATORY REPUDIATION is an act or decla- ration before performance is due under a contract that indicates that the party will not perform his or her obligation on the future date specified in the contract. REPUGNANCY An inconsistency or opposition between two or more clauses of the same deed, contract, or statute, between two or more material allegations of the same PLEADING or between any two writings. Inconsistent defenses or claims are permit- ted under the Federal Rules of Civil Procedure. CROSS REFERENCE Civil Procedure. REQUIREMENTS CONTRACT A written agreement whereby a buyer assents to purchase for a sufficient consideration (the inducement to enter into an agreemen t) all the merchandise of a designated type that he or she might require for use in his or her own established business. The UNIFORM COMMERCIAL CODE (UCC), a body of law adopted by the states that governs commercial transactions, provides that the parties must act in GOOD FAITH where quantity is to be measured by the requirements of the purchaser or, in the case of output contracts, the output of the seller. No quantity that is unreasonably disproportionate to any stated estimate or to any normal or otherwise comparable previous output or requirements can be tendered or demanded. Although the UCC does not explicitly make output and requireme nts agreements enforce- able as contracts, the imp lication of validity is clear. The theoretical difficulty with these agreements has been that they border on being illusory. An agreement by a buyer to purchase from the seller all the particular goods that he or she requires can be interpreted to leave the buyer with a choice as to whether he or she wishes to require any goods at all. Similarly an agreement by which a seller assents to sell all of his or her output to a buyer can be interpreted as leaving the seller free to control his or her output. If read in such manner, these agree- ments appear to leave one of the parties free to perform or not to perform as he or she sees fit. Valid commercial reasons exist, however, for these contracts, and the courts have discovered means of upholding both output and require- ments agreements if the only objection to their enforceability is that they are too indefinite. The UCC does not attempt to dictate contract terms, but it contains two rules of construction that further remove these agreements from the contention that they are too indefinite to enforce and that provide guidance to courts in regard to their enforcement. First, the measure of the quantity entailed must be determined in good faith. The buyer in a requirements agreement or the seller in an output agreement is not free, with an uncon- trolled discretion, to determine the quantity of goods that can be demanded or tendered under the agreement. An illustration of a type of agreement in which one of the parties has an uncontrolled discretion would be one in which the buyer can order as much of a specified quantity of goods “as he or she wants.” Such an agreement, unless there are unusual circum- stances that require a different construction of these w ords, leaves the buyer free to buy or not to buy at his or her discretion. It does not entail mutual duties and constitutes no more than an offer, a proposal by the seller that would become a contract with each order from the buyer, but that could be revoked by the seller at any time prior to acceptance. The buyer is not free to order or not to order at his or her discretion, if an agreement calls for the seller to sell and the buyer to buy all or a stated portion of the buyer’s requirements. When the buyer has requirements, he or she must purchase them from the seller and exercise good faith in ascertaining them. The nonmerchant must act with honesty in fact; the merchant must meet this same test but must also conduct business in accordance with commercial standards of fair dealing in the trade, so that his or her requirements approximate a reasonably foresee- able figure. A seller under an output agreement must meet the same test. Second, the UCC furnishes a center around which the quantity is to be determined. The buyer cannot demand and, therefore, the seller is not obligated to deliver, and the seller cannot GALE ENCYCLOPEDIA OF AMERICAN LAW, 3RD E DITION 348 REPUDIATION tender and, therefore, the buyer is not required to accept any quantity that is unreasonably disproportionate to any estimate that the parties have stated or if no estimate was stated, to any comparable previous requirements or output. If, for example, a seller has agreed to deliver all of the buyer’s requirements of a certain product, and if the buyer has been ordering approximately 500 units each month, the seller would not be obligated to deliver 1,500 units in one month, even though the buyer could prove that 1,500 units were required for his or her business. The determination of which prior period is “comparable” depends upon the nature of the business involved. The UCC does not require that the chosen comparable period be one in which the parties w ere dealing with each other. If this is the first output or requirements contract between the parties and no estimate is stated, the UCC permits any normal or comparab le period involving the seller’s output or the buyer’s requirements to be employed in measuring the obligations under such an agreement. Even though output and requirements contracts are sufficiently defined for enforce- ment, difficult problems of determining the obligations under these agreements arise when- ever there is an unexpected shift in the demand for, or the price of, the goods involved. In these instances, a merchant might search for methods of altering production schedules or modifying output (if a seller) or requirements (if a buyer). Attempts to increase or decrease require- ments often result in disput es between the parties that require judicial intervention. In order to resolve these situations, the “unreason- ably disproportionate” test of the UCC supplies a tool that, when combined with the require- ment of good faith, permits the courts to resolve these disputes. The UCC also provides that a lawful agreement that results in an exclusive dealing in goods imposes, unless otherwise agreed, an obligation by the seller to make his or her best effort to supply the goods and an obligation by the buy er to make his or her best effort to promote their sale. This requirement is a specific application of the general doctrine of good faith. The legality of output, requirements, or other exclusive dealing contracts depends upon the application of federal or state antitrust acts, laws that protect commerce and trade from unlawful restraints, price discriminations, and price fixing. The UCC provides that only “lawful” agreements may be enforced. REQUISITION A written demand; a formal request or require- ment. The formal demand by one government upon another, or by the governor of one state upon the governor of another state, of the surrender of a fugitive from justice. The taking or seizure of property by government. Requisition refers to the seizure of PERSONAL PROPERTY , whereas condemnation entails the taking of real property. RES [Latin, A thing.] An object, a subject matter, or a status against which legal proceedings have been instituted. For example, in a suit involving a captured ship, the seized vessel is the res, and proceedings of this nature are said to be in rem. Res, however, does not always refer to tangible PERSONAL PROPERTY. In matrimonial actions, for example, the res is the marital status of the parties. RES ADJUDICATA See RES JUDICATA. RES GESTAE [Latin, Things done.] Secondhand statements considered trustworthy for the purpose of admis- sion as evidence in a lawsuit when repeated by a witness because they were made spontaneously and concurrently with an event. Res gestae describes a common-law doctrine governing testimony. Under the HEARSAY rule, a court normally refuses to admit as evidence statements that a witness says he or she heard another person say. The doctrine of res gestae provided an exception to this rule. During the nineteenth century and much of the twentieth century, courts applied the exception by following an assortment of common-law rules. With the introduction of the FEDERAL RULES OF EVIDENCE , federal courts abolished res gestae as a common-law doctrine and replaced it with explicit exceptions to the ban on hearsay. To varying degrees, state RULES OF EVIDENCE are modeled on the federal rules. Although the term GALE ENCYCLOPEDIA OF AMERICAN LAW, 3RD E DITION RES GESTAE 349 is now infrequently used, the legacy of res gestae is an integral part of the modern framework of hearsay evidence. Traditionally, two reasons have made hear- say inadmissible: unfairness and possible inac- curacy. Allowing a witness to repeat hearsay does not provide the accused with an opportu- nity to question the speaker of the original statement, and the witness may have misunder- stood or misinterpreted the statement. Thus, in a trial, counsel can object to a witness’s testimony as hearsay. But in the nineteenth century, the borrowing of the concept of res gestae from ENGLISH LAW offered an exception to this rule. Res gestae is based on the belief that because certain statements are made naturally, spontaneously, and without deliberation during the course of an event, they carry a high degree of credibility and leave little room for misun- derstanding or misinterpretation. The doctrine held that such statements are more trustworthy than other secondhand statements and there- fore should be admissible as evidence. As the common-law rule developed, it acquired a number of tests for determining admissibility. To be admissible, the statements must relate, explain, or char acterize an event or transaction. They must be natural statements growing out of the event, as opposed to a narrative of a past, completed affair. Addition- ally, the statements must be spontaneous, evoked by the event itself, and not the result of premeditation. Finally, the original speaker must have participated in the transaction or witnessed the event in question. Thus, for example, a witness might testify that during a bank ROBBERY, she or he heard another person shout, “That person is robbing the bank!” and the statement could be admitted as an exception to the ban on hea rsay. In practice, cases involving res gestae were usually decided by applying some variation of these tests. In the 1959 case of Carroll v. Guffey, 20 Ill. App. 2d 470, 156 N.E.2d 267, an Illinois appellate court heard the appeal of a defendant who was held liable for injuries sustained by another motorist in a car crash. The trial court had admitted the testimony of the plaintiff concerning unidentified eyewitnesses who alleg- edly saw the accident, over the objection of defense counsel who argued that the statements were hearsay. The appellate court ruled that the declarations of the eyewitnesses were not res gestae exceptions: They were not made concur- rently with the collision, but afterward, and were only a narrative of what the eyewitnesses said had taken place. Thus the appellate court reversed the trial court’s decision. The process of refining the concept began in the 1920s, when the influential lawyer and educator Edmund M. Morgan attacked its pliability and vagueness: “[T]his troublesom e expression owes its existence and persistence in our law of evidence to an inclination of judges and lawyers to avoid the toilsome exertion of exact analysis and precise thinking.” In an attempt at clarification, Morgan developed seven categories for the exception. In the 1940s the Model Code of Evidence made further refinements, and by the 1970s the Federal Rules of Evidence had included ele- ments of res gestae in Rule 803 as one of its many exceptions to the hearsay rule. FURTHER READINGS Andrus, Jennifer. 2007. “The Excited Utterance: Construct- ing an Essential Link between the Event and the Statement in Anglo-American Hearsay Doctrine.” Texas Linguistics Forum 51 (April). Moorehead, James Donald. 1995. “Compromising the Hearsay Rule: The Fallacy of Res Gestae Reliability.” Loyola of Los Angeles Law Review 29 (November). Morgan, Edmund M. 1922. “A Suggested Classification of Utterances Admissible as Res Gestae.” Yale Law Journal 31. Prater, Dennis D., and Virginia M. Klemme. 1996. “Res Gestae Raises Its Ugly Head.” Journal of the Kansas Bar Association 65 (October). RES IPSA LOQUITUR [Latin, The thing speaks for itself.] A rebuttable presumption or inference that the defendant was negligent, which arises upon proof that the instrumentality or condition causing the injury was in the defendant’s exclusive control and that the accident was one that ordinarily does not occur in the absence of NEGLIGENCE. Res ipsa loquitur, or res ipsa, as it is commonly called, is really a rule of evidence, not a rule of SUBSTANTIVE LAW. Negligence is conduct that falls below the standard established by law for the protection of others against an unreasonable risk of harm. In order to prevail in a negligence action, a plaintiff must establish by a PREPONDERANCE OF EVIDENCE that the defendant’s conduct was unreasonable in light of the particular situation and that such conduct caused the plaintiff’s GALE ENCYCLOPEDIA OF AMERICAN LAW, 3RD E DITION 350 RES IPSA LOQUITUR injury. The mere fact that an accident or an injury has occurred, with nothing more, is not evidence of negli gence. There must be evidence that negligence caused the event. Such evidence can consist of direct testimony by eyewitnesses who observed the defendant’s unreasonable conduct and its injurious result. Negligence can also be established by CIRCUMSTANTIAL EVIDENCE when no direct evi- dence exists. Circumstantial evidence is evi- dence of one recognized fact or set of facts from which the fact to be determined can be reasonably inferred because it is the logical conclusion that can be drawn from all the known facts. For example, skid marks at the scene of an accident are circumstantial evidence that a car was driven at an excessive speed. The reasoning process must be based upon the facts offered as evidence, together with a sufficient background of human experience, to justify the conclusion. Evidence that merely suggests the possibility of negligence is insufficient, s ince negligence must appear more likely than not to have occurred. Th is i nferenc e must cover all the necessary elements of n egligence: that the defen- dant owed the plaintiff a duty, wh ich the defendant violated by failing to act according to the required standar d of conduct, and that such negligent conduct injured the plaintiff. Res ipsa loquitur is one form of circumstan- tial evidence that permits a reasonable person to surmise that the most PROBABLE CAUSE of an accident was the defendant’s negligence. This concept was first advanced in 1863 in a case in [Attorney name] [Address] [Telephone number] Attorney for Plaintiff, [name] xxx Court, County of xxx [xxx District] xxxxxx ) No. xxx Plaintiff(s) ) vs. ) CERTIFICATE OF RELIANCE ON ) [RES IPSA LOQUITUR] [AND xxxxxx ) ON] [FAILURE TO INFORM] Defendant(s) ) (CCP §411.35(d)) _________________________________ ) [Name] declares: 1. I am the attorney for plaintiff, [name], in this action. 2. This action is one for damages arising out of professional negligence. 3. A certificate of merit is not required because plaintiff intends to rely solely on [the doctrine of res ipsa loquitur] [and on] [defendant [name]'s failure to inform plaintiff of the consequences of a procedure]. I certify under penalty of perjury under the laws of the State of California that the foregoing is true and correct. Date: xxxxxx __________________________________ [Typed name] Attorney for xxxxxx [This certificate must be filed when the complaint is filed, in contrast to the certificate of merit, which must be filed on or before the service of the complaint.] Certificate of Reliance on Res Ipsa Loquitur A sample certificate of reliance on res ipsa loquitur. ILLUSTRATION BY GGS CREATIVE RESOURCES. REPRODUCED BY PERMISSION OF GALE, A PART OF CENGAGE LEARNING. GALE ENCYCLOPEDIA OF AMERICAN LAW, 3 RD E DITION RES IPSA LOQUITUR 351 which a barrel of flour rolled out of a warehouse window and fell upon a passing pedestrian. Res ipsa loquitur was the reasonable conclusion because, under the circumstances, the defen- dant was probably culpab le since no other explanation was likely. The concept was rapidly applied to cases involving injuries to passengers caused by carriers, such as railroads, which were required to prove they had not been negligent. Res ipsa loquitur, as it is in the early 2000s applied by nearly all of the 50 states, deals with the sufficiency of circumstantial evidence and, as in some states, affects the BURDEN OF PROOF in negligence cases. Elements Three basic requirements must be satisfied before a court can submit the question of negligence to the jury under res ipsa loquitur. Inference of Negligence The plaintiff’s injury must be of a type that does not ordinarily occur unless someone has been negligent. This requirement, which is the inference of negli- gence, allows res ipsa to be applied to a wide variety of situations, such as the falling of elevators, the presence of a dead mouse in a bottle of soda, or a streetcar careening through a restaurant. Although many of the cases involve freakish and improbable situations, ordinary events, such as where a passenger is injured when a vehicle stops abruptly, will also warrant the applicati on of res ipsa. Commercial air travel became so safe in the late twentieth century that planes engaged in regularly scheduled commer- cial flights generally do not crash unless someone has been negligent. Vehicular acci- dents caused by a sudden loss of control, such as a car suddenly swerving off the road or a truck skidding on a slippery road and crossing into the wrong lane of traffic, justify the conclusion that such an event would not normally occur except for someone’s negligence. This inference of negligence does not mean that all other possible causes of the injurious event must be eliminated. A plaintiff using res ipsa to enable her case to go to the jury must prove that the defendant’s negligence is the most probable cause of her injuries. The particular nature of the defendant’s negligence need not be pinpointed. For instance, where a bottle of soda explodes in a supermarket immediately after its delivery by the bottler, the injured person does not have to prove that the bottler failed to notice a defect in the bottle or that the soda was overcarbonated. It is sufficient to establish that the explosion would not have occurred unless the bottler had been negligent. Where the inference of negligence depends upon facts beyond the common knowledge of jurors, EXPERT TESTIMONY is necessary to furnish this information. Such testimony is usually presented in cases of professional negligence, such as MEDICAL MALPRACTICE. An expert witness can testify directly in regard to the inferred fact itself, such as when the expert testifies that the plaintiff’s injury would not have occurred if the doctor had not been negligent. Exclusive Control by the Defendant The plaintiff’s injury or damag e must have been caused by an instrumentality or condition that was within the exclusive control of the defen- dant. Some courts interpret this requirement to mean that exclusive control or management must have existed at the time of the injury. This interpretation has led to harsh results. In one case, a customer sat down in a chair in a store while waiting for a salesperson. The chair collapsed and the customer was injured. The court denied recovery to the customer in her negligence action against the store because it found that the chair was not within the exclusive control of the store but rather was under the exclusive control of the customer at the time of injury. This application of the rule has been regarded as inflexible by many courts, since it severely restricts the type of case to which res ipsa can be applied. In response, many state s prescribe that the negligence mu st occur while the defendant has control over the instrumen- tality. In the example of the exploding soda bottle, the negligence of the bottler occurred somewhere in the bottling process. The fact that the bottle was sitting on a supermarket shelf and was no longer in the immediate possession of the bottler does not prevent the reasonable conclusion that the injury result ed from the negligence of the bottler. The injured plaintiff must first show that the bottle was not cracked by mishandling after it left the plant of the bottler. This does not mean, however, that the plaintiff must account for every minute of the existence of the bottle from the time it left the plant. If the plaintiff can substantiate the fact of careful handling in general and the GALE ENCYCLOPEDIA OF AMERICAN LAW, 3RD E DITION 352 RES IPSA LOQUITUR absence of unusual incidents, such as the deliberate tampering of the bottled goods by an unknown person, such facts would permit reasonable persons to conclude that the injury was more likely than not to have been caused by the defendant’s negligence while he had exclu- sive control of the bottle. Since there must be exclusive control by the defendant, res ipsa cannot be used against multiple defendants in a negligence case where the plaintiff claims he has been injured by the negligence of another. For example, a pedes- trian is injured when he is struck by a car that had just collided with another vehicle. The pedestrian institutes a negligence action against one driver and seeks to have res ipsa applied to his case. An inference of negli gence does not arise from the mere fact of the collision, since neither driver is in exclusive control of the situation. If, however, one driver is cleared of fault by some specific evidence, the jury is justified in inferring that the injury was the result of the other driver’s negligence. The requirement of exclusive control by the defendant is not applied in cases involving VICARIOUS LIABILITY or shared responsibility for the same instrumentality or condition. In one case, a person was injured when an elevator in which she was riding fell very rapidly. She brought a negligence action against both the owner of the building and the company that manufactured the elevator and had the mainte- nance service contract for the building. The plaintiff relied completely on res ipsa. The jury found for the plaintiff since a falling elevator is not the type of accident that usually occurs without negligence, so that the negligence of those in control can be inferred. The service contract between the elevato r company and the building owner established the fact that they exerted joint control over the elevator. The requirement of exclusive control by a defendant of the instrumentality causing injury does not mean that only a single entity has control. Where two or more defendants are acting jointly, the doctrine of res ipsa can be applied to establish their negligence. Some state courts have departed from the requirement of exclusive control and applied res ipsa loquitur against multiple defendants. In one case, while an anesthetized patient was under- going an operation for appendicitis, he suffered a trau matic injury to his shoulder. Res ipsa was applied against all of the doctors and hospital employees connected with the operation, al- though not all of them were negligent. The court based its decision on the special responsi- bility for the plaintiff’s safety undertaken by everyone concerned. Freedom from Contributory Negligence The event in question must not have been attribut- able to any cause for which the plaintiff is responsible. The plaintiff must not have done anything that significantly contributed to the accident that caused the injury. In one case, a water skier was injured when the propeller of the boat that had been towing him struck his arm as the boat was attempting to pick him up. He sued the driver and the owner of the boat for negligence, which could be found if res ipsa was applied. The plaintiff attempted to dive under- water when he saw the boat approaching him, but he was unsuccessful in escaping injury. The defendants claimed that the attempted dive caused the accident and, therefore, res ipsa was inapplicable. The trial court accepted this argument, which was later rejected by the appellate court. The appellate court decided that the question of whether the attempted dive caused the accident should have been presented to the jury under res ipsa. It stated that a plaintiff may rely upon res ipsa loquitur even though he has participated in the events leading to the accident if the evidence excludes his conduct as the responsible cause. In light of the skier’s testimony that he was about to be struck by the boat, as well as the testimony of other eyewitnesses, the jury could logically conclude that the attempted dive was not a cause of the accident. Accessibility of Evidence In addition to the three basic requirements, a few states apply res ipsa in negligence cases where the evidence of the facts of the event is more accessible to the defendant than to the plaintiff. In one state , for example, a plaintiff was injured w hen the bleacher section in which she was sitting collapsed during a basketball game under the management and supervision of the defendant high school athletic association. She sued the association for negligence under the doctrine of res ipsa. The appellate court, reviewing a verdict for the plaintiff, affirmed it because “the underlying reason for the res ipsa GALE ENCYCLOPEDIA OF AMERICAN LAW, 3RD E DITION RES IPSA LOQUITUR 353 rule is that the chief evidence of the true cause of the injury is practically accessible to the defendant but inaccessible to the injured person.” The Effect of Res Ipsa Res ipsa loquitur is usually used when there is no direct evidence of the defendant’s negligence. The facts presented to the court must meet the three basic requirements. Once the court decides that the facts of a particular case warrant the application of res ipsa, it instructs the jury on the basic principles, but it is the function of the jury to decide the credibility and weight of the inference to be drawn from the known facts. The jury can conclude that the defendant was negligent, but the jury is not compelled to do so. Everything depends upon the particular facts of each case. An inference of negligence might be so clear that no reasonable person could fail to accept it. If the defendant offers no explanation, the court can direct a verdict for the plaintiff if the inference is so strong that reasonable jurors could not reach any other conclusion. Where the jury considers the question of negligence, it can decide that the facts do not logically lead to an inference of the defendant’s negligence, even if the defendant did not offer any evidence in her defense. If the defendant presents evidence that makes it unlikely that she has acted negligently, the plaintiff will lose his case unless he can rebut the evidence, since such evidence destroys the inference of negligence created by res ipsa. A minority of courts hold that res ipsa creates a rebuttable presumption of negligence. Unless the defendant offers sufficient evidence to contradict it, the court must direct a verdict for the plaintiff. Some states have gone as far as to shift the burden of proof to the defendant, requiring her to introduce evidence of greater weight than that of the plaintiff. FURTHER READINGS King, Michael G. 1999. “‘Res’ of the Story.” Los Angeles Daily Journal (July 16). Tanovich, David M. 2002. “Res Ipsa Loquitur and Racial Profiling.” Criminal Law Quarterly 46 (October). Twerski, Aaron D. 2009. “Negligence Per Se and Res Ipsa Loquitor: Kissing Cousins.” Wake Forest L. Rev. 44 (winter). CROSS REFERENCES Evidence; Malpractice; Negligence; Probable Cause. RES JUDICATA [Latin, A thing adjudged.] A rule that a final judgment on the merit s by a court that has jurisdiction is conclusive between the parties to a suit as to all matters that were litigated or that could have been litigated in that suit. The U.S. legal system places a high value on allowing a party to litigate a civil lawsuit for money damages only once. U.S. courts employ the rule of res judicata to prevent a dissatisfied party from trying to litigate the issue a second time. Res judicata will be applied to a pending lawsuit if several facts can be established by the party asserting the res judicata defense. First, the party must show that a final judgmen t on the merits of the case had been entered by a court that has jurisdiction over the matter. This means that a final decision in the first lawsuit was based on the factual and legal disputes between the parties rather than on a procedural defect, such as the failure to serve the DEFENDANT with legal process. Once a court makes a final decision, it enters a final judgment in the case. The judgment recites pertinent data about the case, such as the names of the parties, the fact that a jury verdict was rendered, and the disposition made. The judgment is filed with the COURT ADMINISTRATOR for that judicial jurisdiction. The party asserting res judicata, having introduced a final judgment on the merits, must then show that the decision in the first lawsuit was conclusive as to the matters in the second suit. For example, assume that the PLAINTIFF in the first law suit asserts that she was injured in an auto accident. She sues the driver of the other auto under a theory of NEGLIGENCE. A jury returns a verdict that finds that the defendant was not negligent. The injured driver then files a second lawsuit allegin g additional facts that would help her prove that the other driver was negligent. A court would dismiss the second lawsuit under res judicata because the second lawsuit is based on the same CAUSE OF ACTION (negligence) and the same injury claim. Under the companion rule of COLLATERAL ESTOPPEL , which is also known as “issue preclu- sion,” the plaintiff will not be allowed to file a second lawsuit for money damages using a different cause of action or claim. Under collateral ESTOPPEL, the parties are precluded from litigating a second lawsuit using a different GALE ENCYCLOPEDIA OF AMERICAN LAW, 3RD E DITION 354 RES JUDICATA cause of action based on any issue of fact common to both suits that had been litigated and determined in the first suit. For example, the plaintiff who lost her auto accident case based on a theory of negligence cannot proceed with a second lawsuit based on an ALLEGATION that the driver intentionally struck her auto, thus making it an intentional-tort cause of action. A court would assert collateral estoppel because the plaintiff could have alleged an intentional tort cause of action in the original complaint. The application of res judicata and collateral estoppel produces finality for the parties and promotes judicial economy. Parties know that when final judgment is entered and all appeals are exhausted, the case is over, and the decision will be binding on all issues determined in the lawsuit. CROSS REFERENCES Collateral Estoppe l; Issue Preclusion. RESCIND To declare a contract void—of no legal force or binding effect—from its inception and thereby restore the parties to the positions they would have occupied had no contract ever been made. RESCISSION The abrogation of a contract, effective from its inception, thereby restoring the parties to the positions they would have occupied if no contract had ever been formed. By Agreement Mutual rescission, or rescission by agreement, is a discharge of both parties from the obligations of a contract by a new agreement made after the execution of the original contract but prior to its performance. Rescission by mutual assent is separate from the right of one of the parties to rescind or cancel the contract for cause, or pursuant to a provision in the contract. The parties to an executory or incomplete contract can rescind it at any time by mutual agreement, even if the contract itself contains a contrary provision. A rescission by mutual assent can properly include a promise by either or both parties to make restitution as part of the contract of rescission. The right to rescind is limited to the parties to the contract or those legally authorized to act for them. As with other contracts, the parties to the rescission agreement must be mentally competent. Form The rescission agreement can be either written or oral. An implied agreement is also effective, provided the assent of the parties can be shown by their acts and the surrounding circumstances. An express rescission of a contract as a whole is adequate and effective, without specifically designating each and every clause to be rescinded. Unless a statute provides otherwise, an oral rescission agreement is valid, even though the contract being rescinded contains a provision that it can be altered only in writing. Assent All the parties to the contract must asse nt to its resciss ion because mutual rescis- sion involves the formation of a new contract. A meeting of minds can be reached by an off er to rescind and an accept ance by the other party. One party to a co ntract cannot rescind it simply by giving notice to the other party that he or she intends to d o so. Although a breach of contract by one party is not an offer to rescin d, the other party can treat the repudiation as an offer to rescind that he or she can accept, leading to rescission of the contract by mutual assent. Rescission mu st be clearly expressed, however, and the conduct of the parties must be inconsistent with the existence of the contract. The fact that some of the materials that form part of the subject matter of the contract have been returned is not conclusive as to whether rescission has occurred. Consideration An agreement to rescind a prior contract must be based on a sufficient consideration, an inducement. When a contract remains executory on both sides, an agreement to rescind by one side is sufficient consideration for the agreement to cancel on the other, and vice versa. If the contract has been executed on one side, an agreement to rescind that is made without any new consideration is void, that is to say of no legal force or binding effect. Operation and Effect The mutual rights of the parties are controlled by the term s of their rescission agreement. The parties are generally restored to their original rights in regard to the subject matter. They no longer have any rights or obligations under the rescinded contract, and GALE ENCYCLOPEDIA OF AMERICAN LAW, 3RD E DITION RESCISSION 355 no claim or action for subsequent breach can be maintained. Whether rights or obligations already ac- crued are abandoned when the contract is rescinded in the COURSE OF PERFORMANCE depends on the intention of the parties, as deduced from all attending facts and circumstances, and on whether the parties have reserved such rights. Recovery can be allowed, however, for partial performance. Wrong or Default of Adverse Party No ARBITRARY right exists to rescind a contract. An executory contract that is VOIDABLE can be rescinded on the grounds of FRAUD, mistake, or incapacity. A contract, whether oral or written, can be rescinded on the ground of fraud. The right to rescind for fraud is not barred because the defrauded party has failed to perform. Gener- ally, false statements of value, or the failure to perform a promise to do something in the future without fraudulent intent, will not provide a basis for rescission for fraud or MISREPRESENTATION. A party proves sufficient grounds for rescission by showing that he or she was induced to part with some legal right or to assume some legal liability that he or she otherwise would not have done but for the fraudulent representations. On discovering the fraud, the victimized party can affirm the contract and sue for damages. He or she might instead repudiate the contract, tender back what he or she has received, and recover what he or she has parted with, or its value; the adoption of one remedy, however, excludes the other. A contract obtained by duress can be rescinded, and in such a case, the same rules apply as in the case of fraud. A contract cannot be avoided because of duress or coercion, however, unless the duress was sufficient to overcome completely the will of the party who is seeking to avoid the contract. A mutual mistake concerning a material fact entitles the party affected by the mistake to rescind the contract, unless the contract has already been completed and rescission would be an injustice to the other party. Rescission can also be allowed even for a unilateral, or one- sided, mistake in order to prevent an UNJUST ENRICHMENT of the other party. On rescission, the aggrieved party can recover the money he or she has paid or the property he or she has delivered under the contract. A contract made by a person of unsound mind can be rescinded when the parties can be restored to the status quo. This rule applies even if the opposite party was unaware of the mental condition, and the contract was fair, reasonable, and made in GOOD FAITH for adequate consider- ation. When one party knows of the other’s incapacity, the contract can be rescinded on the ground of fraud. When both parties are sane and the contract is valid , subsequent insanity of one of the parties is not a ground for rescission, unless it affects the substance or purpose of the contract, as in the case of a personal services contract. As a general rule, a contract cannot be rescinded because one of the parties was intoxi- cated at the time it was made. If, however, unfair advantage was taken of a person’s intoxicated condition, or if the intoxication was induced by the party seeking to take advantage of the contract, the contract can be set aside on the ground of fraud. Similarly, habitual drunkenness that impairs a party’s mental abilities can con- stitute a ground for rescission. Inadequate Consideration Mere inadequacy of consideration is not a sufficient reason to justify rescission. When the consideration is so inadequate that it shocks the conscience of the court or is so closely connected with suspicious circumstances or misrepresentations as to provide substantial evidence of fraud, it can furnish a basis for relief. Nonperformance or Breach One party to a contract can rescind it because of substantial nonperformance or breach by the other party. The party who knowingly and willfully fails to perform cannot complain that the other party to the contract has injured him or her by terminating the contract. The right to rescind does not arise from every breach but is permitted only when the breach is so substantial and fundamental that it defeats the objective of the parties in making the agreement. The breach must pertain to the essence of the contract. The act must be an unqualified refusal by the other party to perform and should amount to a decision not to be bound by the contract in the future. A party to a contract who is in default GALE ENCYCLOPEDIA OF AMERICAN LAW, 3RD E DITION 356 RESCISSION cannot, however, rescind because of a breach by the other party. When time is of the essence in a contract, failure to perform within the time stipulated is a ground for rescission. Otherwise a delay in the time of performance is not considered a material breach justifying rescission. When performance is intended within a reasonable time, one party cannot suddenly and without reasonable notice terminate the contract while the other party is attempting in good faith to perform it. An unconditional notice by one party that he does not intend to perform a contract is a ground for rescission by the other party. In order to justify rescission, the refusal must be absolute and unconditional. When one party to a contract abandons it and refuses further performance or her conduct shows that she is repudiating the contract, the other party is entitled to rescission. A disagree- ment over the terms of the contract and a subsequent refusal to perform in a particular manner by one of the parties do not constitute an ABANDONMENT of the contract justifying rescission. Time A right to rescind must be exercised promptly or within a reasonable time after the discovery of the facts that authorize the right . A reason- able time is defined by the circumstances of the particular case. The rule that rescission must be prompt does not operate where an excuse or justification for a delay is shown. FURTHER READINGS McGowan, Diane M., and A. Thomas Brisendine. 2001. “Option Medley Continued: Rescissions.” Benefits Law Journal 14 (autumn). Sherwin, Emily. 2003. “Nonmaterial Misrepresentation: Damages, Rescission, and the Possibility of Efficient Fraud.” Loyola of Los Angeles Law Review 36 (winter). CROSS REFERENCES Abrogation; Contracts; Fraud. RESCUE The crime of forcibly and knowingly freeing another from arrest, imprisonment, or legal custody. In ADMIRALTY AND MARITIME LAW, the taking back of property seized as prize from the po ssession of the captors by the party who originally lost it. At COMMON LAW, the crime of rescue involved illegally freeing a prisoner. From the nineteenth century onward, such crimes became romanticized in the popular entertain- ment of Westerns and crime dramas, where prisoners were freed from jail by their criminal associates. In the early twenty-first century, this form of rescue is an offense under federal law. Some states treat it as a common-law offense, whereas others define it under statute. In a different legal sense, rescue under admi- ralty and maritime law means the taking back ofgoodsthathavebeencapturedatsea. The crime of rescue has four elements. First, the arrest of a prisoner must be lawful. Second, the prisoner must be in actual custody, that is, in the personal custody of an officer or in a prison or jail. Third, at common law and under some statutes, the rescue must be forcibly made. Fourth, the prisoner must actually escape. At common law, the person guilty of rescue is guilty of the same grade of offense, whether felony or misdemeanor, as the person who is rescued. Under federal law, rescue of a prisoner held in federal custody is a felony. As defined by 18 U.S.C.A. § 752 (1994), rescue is the crime of instigating or assisting escape from lawful custody. The law takes its punishment provi- sions from the federal statu te (18 U.S.C.A. § 751 [1994]) that makes it unlawful for a prisoner to escape from a place of confinement: Conviction carries fines of up to $5,000 and imprisonment of up to five years for the rescue of an adult, and equivalent fines and imprisonment of up to a year for the rescue of a minor. Thus, like the common-law definition, the same pu nishment applies to a person aiding an escape as that given to the person escaping. Criminal cases involving rescue can be dramatic. In the 1933 case of Merrill v. State, 42 Ariz. 341, 26 P.2d 110, Herbert Merrill appealed his conviction for attempting to rescue Albert De Raey from the Maricopa County, Arizona, jail. On January 10, 1933, Merrill brought acid to the jail at De Raey’s request so that De Raey could use it to cut through the bars on his jail cell. Merrill was subsequently convicted of attempting to rescue under section 4537 of Arizona’ s Revised Code of 1928. On appeal, however, the appellate court reversed the conviction: it found that although Merrill had apparently assisted in an escape attempt, he had not forcibly attempted to effect a rescue. Thus he had been improperly charged, the GALE ENCYCLOPEDIA OF AMERICAN LAW, 3RD E DITION RESCUE 357 . RESOURCES. REPRODUCED BY PERMISSION OF GALE, A PART OF CENGAGE LEARNING. GALE ENCYCLOPEDIA OF AMERICAN LAW, 3 RD E DITION RES IPSA LOQUITUR 351 which a barrel of flour rolled out of a warehouse window and. minute of the existence of the bottle from the time it left the plant. If the plaintiff can substantiate the fact of careful handling in general and the GALE ENCYCLOPEDIA OF AMERICAN LAW, 3RD E. degrees, state RULES OF EVIDENCE are modeled on the federal rules. Although the term GALE ENCYCLOPEDIA OF AMERICAN LAW, 3RD E DITION RES GESTAE 349 is now infrequently used, the legacy of res gestae is