What does rescission of contract mean?

Rescission of contract refers to the annulment or cancellation of a contract, which typically restores the parties to their positions before the contract was formed. In the context of the provided choices, opting for the cancellation due to breach as the definition of rescission is appropriate.

When one party fails to fulfill their obligations as outlined in the contract, the other party may choose to rescind the contract, effectively terminating their agreement and lying the groundwork for any potential claims for damages that may arise due to the breach. This cancellation can occur due to various reasons, including misrepresentation, fraud, duress, or significant breaches that undermine the contract's purpose.

This choice aligns closely with the legal principle that allows parties to relieve themselves of their contractual obligations when the agreed terms are not met sufficiently or appropriately by the other party. Other options, such as amending contract terms, making a legal claim for damages, or extending the contract duration, do not capture the essence of rescission, which specifically involves nullifying the contract, rather than modifying or prolonging it.