Rescission in Texas, A Suspect Remedy

George P. Roach, non

Abstract

Rescission in Texas, A Suspect Remedy

Equitable remedies are sometimes overlooked even when favorable ex post changes in values or operating performance warrant their serious consideration. Due to liberalized standards for pleading and electing alternative remedies, rescission in Texas can provide a windfall to the claimant in comparison to standard monetary damages especially after favorable ex post changes. Texas courts are aware of the windfall incentive and can treat the claimant’s plea for rescission as suspect or opportunistic. Litigators on either side of a plea for rescission should consider how their case supports or refutes the suspicion that rescission would unjustly enrich the claimant.

The article briefly traces the impact of Texas courts’ unique history of general jurisdiction and adoption of the British common law on equitable remedies. It examines the key factors and issues that are considered in a trial court’s prerogative to grant or deny an equitable remedy in Texas. Like decisions relating to the Doctrine of Irreparable Injury, opinions on rescission can be equivocal or sympathetic to the case facts. Even though Texas provides juries for claims in equity, the trial judge exercises substantial authority and discretion over these remedies. The variability inherent in the discretion is compounded by an opaque process that tends to avoid direct discussion of the key factors that determined the opinion.