How a Delay Can Prove Fatal to Rescinding a Contract in NY
One of the less-known, but no less critical, components needed to repudiate a contract under New York law is promptness.
Simply put, you can't dilly-dally, or hedge, once you learn about the fraud perpetrated by the other party to the agreement that induced you to sign on the dotted line; if you hesitate, you will waive your right to undo the agreement, and the door to rescission will close.
To that end, New York State's Court of Appeals (the highest court in New York), summarized this rule as follows:
"[A] plaintiff waive[s] its right to seek rescission of the ... agreement by failing to promptly seek rescission after accepting the benefits of that agreement (see New York Tel. Co. v Jamestown Tel. Corp., 282 NY 365, 372-373 ; R & A Food Servs. v Halmar Equities, 278 AD2d 398 ; Capstone Enters. of Port Chester v County of Westchester, 262 AD2d 343 )."
I suspect that one reason that many, if not most, parties involved in a breach of contract situation don't seek rescission is their difficulty in demonstrating that they moved promptly to repudiate the agreement after learning of the fraud.