What is typically the outcome if one party rescinds the contract?

When one party rescinds a contract, the typical outcome is that the contract is canceled. Rescission is a legal remedy that annuls the contract, effectively bringing both parties back to the position they were in before the contract was made. It is important to understand that rescission may occur due to several reasons, such as misrepresentation, fraud, undue influence, or a significant change in circumstances.

In this context, when a contract is rescinded, it means that neither party has any further obligations under the original agreement, and they cannot enforce each other's performance. Both parties are released from any duties that may have existed.

The other options do not accurately reflect the outcome of rescission: if both parties remained bound by the original terms, it would indicate that the contract is still valid. Requiring fulfillment of the contract with penalties contradicts the essence of rescission since any penalties or obligations would no longer apply. Similarly, the notion that the other party could enforce the contract would not be applicable, as rescission eliminates the enforceability of the contract itself.