Section 64 of the Indian Contract Act, 1872: Consequences of Rescission of Voidable Contract

Section 64 explains what follows when the person entitled to avoid a voidable contract chooses to rescind it. It releases the other party from performance of promises for which that party is the promisor and requires the rescinding party, as far as possible, to restore benefits received under the contract.

Updated legal overview: September 2026

Text and Meaning of Section 64

Section 64 - Consequences of rescission of voidable contract.
When a person at whose option a contract is voidable rescinds it, the other party need not perform any promise contained in the contract in which that party is the promisor. If the rescinding party has received a benefit under the contract from another party, the rescinding party must, so far as may be possible, restore that benefit to the person from whom it was received.

The statutory text should always be checked against the current official text of the Act. Section 64 is part of Chapter IV, dealing with contracts which need not be performed.

What Is a Voidable Contract?

Section 2(i) of the Indian Contract Act defines a voidable contract as an agreement which is enforceable by law at the option of one or more parties, but not at the option of the other or others. In practical terms, the contract remains effective unless the party having the legal option to avoid it elects to rescind it.

Voidability can arise under provisions dealing with matters such as absence of free consent. For example, Sections 19 and 19A address agreements where consent is caused by coercion, fraud, misrepresentation or undue influence, subject to the conditions stated in those provisions.

Legal Consequences Under Section 64

Rule	Effect
Rescission by the entitled party	The statutory consequences arise when the person at whose option the contract is voidable actually rescinds it.
Future performance	The other party is no longer required to perform a promise in the contract in which that party is the promisor.
Restoration of benefit	The rescinding party must restore, so far as may be, any benefit received from another party under the contract.

Restitution After Rescission

The restoration requirement prevents a party from both avoiding a voidable contract and retaining a benefit received under it. The obligation is expressed as restoration "so far as may be", so the nature of the benefit and the circumstances in which restoration is sought can be relevant.

Section 64 should be distinguished from Section 65. Section 64 concerns rescission of a voidable contract, whereas Section 65 addresses an advantage received under an agreement discovered to be void or a contract that becomes void.

Related Provisions

Section 62 deals with novation, rescission and alteration by agreement of the parties.
Section 66 deals with the mode of communicating or revoking rescission of a voidable contract.
Section 75 provides for compensation to a person who rightfully rescinds a contract.

Rescission Under the Specific Relief Act, 1963

Where judicial rescission is sought, the Specific Relief Act, 1963 is also relevant. Section 27 specifies circumstances in which a person interested in a contract may sue to have it rescinded and circumstances in which a court may refuse rescission. The precise remedy depends on the contract, the ground of voidability, subsequent conduct and the relief claimed.

Practical point: Section 64 states the consequences of rescinding a voidable contract. It does not by itself determine every question about whether a particular contract is voidable or whether judicial rescission should be granted. Those issues must be considered with the provisions creating the right to avoid the contract and, where applicable, the Specific Relief Act, 1963.

Frequently Asked Questions

Does rescission automatically allow the rescinding party to keep benefits already received?

No. Section 64 expressly requires the rescinding party to restore, so far as may be, a benefit received under the contract from another party.

Is Section 64 the same as Section 65?

No. Section 64 applies to rescission of a voidable contract. Section 65 concerns benefits received under an agreement discovered to be void or under a contract that subsequently becomes void.

Can compensation also be claimed after rightful rescission?

Section 75 of the Indian Contract Act deals with compensation for a person who rightfully rescinds a contract. Whether compensation is available in a particular dispute depends on the facts and applicable law.