It is generally said that a defrauded party must elect whether he will affirm the fraudulent transaction or rescind it. But a transaction though induced by fraud is not on that account void, it is only voidable. Consequently if nothing is done the transaction is not avoided, and the rights of the parties will be fixed by the agreement which they made without any manifestation of election. The right to sue for deceit which is based on the assumption that the fraudulent transaction is to stand does not, therefore, require prompt action by the injured party.33 The Statute of Limitations alone prevents excessive delay, though it is obvious that delay in asserting a right of action for fraud will tend to show both that no fraud was perpetrated and, in connection with other circumstances, that if there was fraud, any right of action that may have existed has been discharged. Setting a fraudulent bargain aside, however, is an alternative right given on equitable principles to the injured party and, therefore, if this remedy is desired it must be sought with reasonable promptness after the fraud has been discovered.34 But his silence or delay has operated to the prejudice of the other party, he may first assert his right when his adversary first asserts his claim by action. The failure of the vendee to disaffirm the contract might sometimes prevent the vendor from selling to another." 36
32 Rhode Island v. Massachusetts, 15 Pet. 233,10 L. Ed. 721; Medical Society v. Gilbreth, 208 Fed. 899; Trenton Terra Cotta Co. v. Clay Shingle Co., 80 Fed. 46; Hand v. Cox, 164 Ala. 348, 51 So. 519; Hansford v. Freeman, 99 Ga. 376,27 S. E. 706; Dazey v. Binkley, 285 111. 513, 121 N. E. 165; Koons v. Blanton, 129 Ind. 383, 27 N. E. 334; Scott v. Spurr, 169 Ky. 575, 184 S. W. 866; Hitchins v. Pettingill, 58 N. H. 386; Hayes v. Stiger, 29 N. J. Eq. 196; Green v. Stone, 54 N. J. Eq. 387, 34 AtL 1099, 55 Am. St. 577; Walker v. Bourgeois, 88 N. J. Eq. 124, 102 Atl. 250; Cleveland v. Bateman, 21 N. Mex. 675, 158 Pac. 648, Ann. Cas. 1918 E.
1011; Welles v. Yates, 44 N. Y. 525;Kyle v' Fehley, 81 Wis. 67, 29 Am. St. Rep. 866, 51 N. W. 257; Moehlenpah v. Mayhew, 138 Wis. 561, 119 N. W. 826.
33 Cottrill v. Krum, 100 Mo. 397, 13 S. W. 753, 18 Am. St. Rep. 549; Huber Mfg. Co. v. Hunter, 99 Mo. App. 46.
34 Clough v. London, etc., Ry. Co., L. R. 7 Ex. 26; Upton v. Tribilcock, 91 U. S. 45, 23 L. Ed. 203; Pence v. Langdon, 99 U. S. 578, 25 L. Ed. 420; Mudsill Mining Co. v. Watrous, 61 Fed. 163, 22 U. S. App. 12, 9 C. C. A. 415; Blank v. Aronson, 187 Fed. 241, 109 C. C. A. 327; Bowden v. Spellman, 59 Ark. 251, 259, 27 S. W. 602; Board
"The question of how much time a party to a contract has per mitted to elapse is not necessarily determinative of the right to rescind; the immediate consideration being whether the period has been long enough to result in prejudice to the other party."35 "In the case of an executory contract a refusal to perform any obligation thereunder and the defence of an action brought thereon are all that the defrauded party can do by way of asserting his right to disaffirm the contract, and, unless of Water Com'rs v. Bobbins, 82 Conn. 623, 74 Atl. 938; Cedar Rapids Ins. Co. v. Butler, 83 Iowa, 124, 129, 48 N. W. 1026; Nichols & Shepard Co. v. Wheeler, 150 Ky. 169, 150 S. W. 33; Byrd v. Rautman, 85 Md. 414, 36 Atl. 1099; Boles v. Merrill, 173 Mass. 491, 53 N. E. 894, 73 Am. St. Rep. 308; Barnard v. Campbell, 58 N. Y. 73, 17 Am. Rep. 208; Baker v. Lever, 67 N. Y. 304, 309, 23 Am. Rep. 117; Trott v. Schmitt, 119 N. Y. App. D. 474,104 N. Y. S. 98; Ditton v. Purcell, 21 N. Dak. 648, 132 N. W. 347, 36 LR.A. (N. 8.) 149; Robinson 0. Roberto, 20 Okl. 787, 95 Pac. 246; Koehler 9. Dennison, 72 Or. 362, 143 Pac. 649; Houston Motor Car Co. v. Brashear (Tex. Civ. App.), 158 8. W. 233.
35 Brown v. Young, 62 Ind. App. 364,110 N. E. 562, 565; Basye v. Paola Refining Co., 79 Kan. 755, 101 Pac. 658,25 L. R. A. (N. S.) 1302, 131 Am. St. Rep. 346; Roberts v. James, 83 N. J. L. 492, 85 Atl. 244, Ann. Cas. 1914 B. 859. In the case last cited, Swayse, J., said: "It is also settled that one who desires to rescind a contract must act within a reasonable time. Dennis 0. Jones, 44 N. J. Eq. 513, 14 Atl. 913, 6 Am. St. Rep. 899; Clam-pitt v. Doyle, 73 N. J. Eq. 678, 70 Atl. 129. What is a reasonable time necessarily depends on the circumstances of each particular case. It is settled in the English courts that, unless the situation of the other party has changed to his detriment, the contract continues until the party defrauded elects to avoid it, and he may keep the question open as long as he does nothing to affirm the contract. Clough v. London & N. Ry.  L. R. 7 Ex. 26; Morrison v. Universal Marine Ins. Co.  L. R. 8 Ex. 197, 205; United Shoe Machinery Co. of Canada v. Brunet  A. C. 330. He may even wait until action is brought against him, (Clough v. London & N. Ry., ubi supra), and a plea setting up the fraud amounts to a rescission of the contract. Lawton v. Elmore, 27 L. J. Ex. 141; Dawes v. Harness, L. R. 10 C. P. 166; Aaron's Reefs v. Twiss  A. C. 273. The case last cited was an action by a company against a shareholder for calls upon his stock. In such cases the right of creditors and other stockholders to have the stock paid for requires a prompt disaffirmance of the subscription to stock; but, inasmuch as in the case before the court the rights of creditors and other stockholders were not involved, it was held enough to set up the fraud by way of defence when action was brought."
In Armstrong v. Jackson,  2 K. B. 822, 830, McCardie, J., said: "If, however, he delays his claim to rescission until after the lapse of six years from his discovery of the fraud, then the Court will (apart from any other point) act by analogy to the Statute of Limitations and refuse to grant relief; see Oelkers v. Ellis,  2 K. B. 139, 151."