Be careful with the wording of the termination clause!
A house was sold, with part of the price paid in cash and the balance converted into a life annuity. Nearly 23 years later, the buyers stopped making payments. The sellers then filed a lawsuit seeking to have the sale rescinded and to recover the unpaid installments. The judges granted these requests, but the buyers challenged part of that decision. In support of their argument, they contended that the rescission of the contract must place the parties in the same position as if there had been no contract at all, and therefore entails the return of the “lump-sum payment” initially paid to the seller. They ultimately prevailed. After noting that the termination clause in the sales contract provided that, in the event of rescission, only the installments already paid would be retained by the seller, the Court of Cassation concluded that the judges could not allow the seller to retain the “lump sum” and the installments due and unpaid as of the date of termination without treating them as damages.
