FS Credit Opportunities Corp. v. Saba Capital Master Fund, Ltd. · ¶21

It bears emphasis that contract law treats rescission as a remedy, not a cause of action. See H. Black, Rescission of Contracts and Cancellation of Written Instruments §1 (1916) (Black). Suits seeking rescission end up before courts in various ways. A party to a contract may bring an action under state law—say, for breach of contract—and ask the court to undo the contract. See 26 R. Lord, Williston on Contracts §68:22 (4th ed. 2019). Or she may seek rescission when raising an affirmative defense such as fraud, mistake, or duress in a breach-of-contract suit. See 27 id., §69:48 (2020); Brief for United States as Amicus Curiae 19. Or a nonparty, such as a shareholder, may seek rescission alleging that corporate officers violated their fiduciary duties. §80a–35(b). Regardless, other sources of law typically supply the right of action in suits requesting rescission.

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