In the fall of 1995, during their search for a new residence, appellants [Benjamin K. and Julie S. Merritt] inspected Craig’s property located at Pergin Farm Road in Garrett County [Maryland]. After viewing the residence, appellants advised Craig that they were interested in purchasing the property; however, their offer was contingent upon a satisfactory home inspection. On November 5, 1995, appellants, their inspector, and appellee’s husband Mark Craig conducted an inspection of the basement area of the residence, during which there was an examination of cistern and water supply pipes. The examination revealed that the cistern had been used to store a water supply reserve, but was not currently utilized.

   The inspector advised appellants that the system he had observed was one which utilized a submersible pump in the well from which water flowed to a pressure tank in the basement. The pressure tank distributed water through the internal piping system of the house. There were also two water lines that entered into the basement area. One of the lines came from an 800-foot well that was located on the property, and the other line came from a well located on the adjacent property. The well located on the adjacent property supplied water to both appellants’ residence and a guest house owned by Craig. The existence of the adjacent well was not disclosed to appellants.

   On December 2, 1995, a contract of sale for the property was executed between appellants and Craig, along with a ‘‘Disclosure Statement’’ signed by Craig on June 9, 1994, and acknowledged by appellants on November 2, 1995, affirming that there were no problems with the water supply to the dwelling. Between November 5, 1995 and June 1996, Craig caused the water line from the guest house to appellants’ residence to be cut, and the cistern reactivated to store water from the existing well on appellants’ lot. On May 18, 1996, Craig’s husband advised Dennis Hannibal, one of the real estate agents involved in the deal, that he had spent $4,196.79 to upgrade the water system on appellants’ property and to restore the cistern and remove appellants’ house from the second well on Craig’s guest house property. On June 14, 1996, appellants and Craig had settlement on the property. Later that afternoon, Craig’s husband, without appellants’ knowledge, excavated the inside wall of appellants’ house and installed a cap to stop a leaking condition on the water line that he had previously cut.

   Subsequently, appellants, while attempting to fill a water bed, noticed that the water supply in their well had depleted. On July 13, 1996, appellants met with Craig to discuss a solution to the water failure problem, believing that Craig was responsible for cutting a water line to their house. Appellants agreed with Craig to conduct a flow test to the existing well and contribute money for the construction of a new well. On October 29, 1996, the well was drilled and produced only one half gallon of water per minute. On December 13, 1996, appellants paid for the drilling of a second well on their property, but it failed to produce water. In January 1997, appellants contacted a plumber, Robert Warnick, who confirmed that the line from the guest house well to appellants’ residence had been cut flush with the inside surface of the basement wall and cemented closed. Appellants continued to do further work on the house in an effort to cure the water problem.

   On February 11, 1997, appellants brought suit against Craig and other appellees in the Circuit Court for Garrett County, seeking rescission of the deed to the property and contract of sale, along with compensatory and punitive damages. During the course of the trial, the judge dismissed appellants’ claim for rescission on the ground that they had effectively waived their right to rescission. * * * At the close of trial, the jury returned a verdict in favor of appellants and awarded compensatory damages in the amount of $42,264.76. Appellants were also awarded punitive damages in the amount of $150,000. Subsequently, appellants filed a motion to alter or amend the judgment requesting the court to grant rescission of the contract of sale and the deed, which the circuit court denied on June 17, 1998. Craig moved for judgment notwithstanding the verdict on May 8, 1998, which was also denied by the circuit court. Following the circuit court action, this appeal ensued.

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   * * * Under Maryland law, when a party to a contract discovers that he or she has been defrauded, the party defrauded has either ‘‘a right to retain the contract and collect damages for its breach, or a right to rescind the contract and recover his or her own expenditures,’’ not both. [Citations.] ‘‘These rights [are] inconsistent and mutually exclusive, and the discovery put[s] the purchaser to a prompt election.’’ [Citation.] ‘‘A plaintiff seeking rescission must demonstrate that he [or she] acted promptly after discovery of the ground for rescission,’’ otherwise the right to rescind is waived. [Citations.] * * *

   In the case sub judice [before the court], appellants claim that they were entitled to a rescission of the subject contract of sale and deed and incidental damages. Appellants also claim that they were entitled to compensatory and punitive damages arising from Craig’s actions. Appellants, however, may not successfully rescind the contract while simultaneously recovering compensatory and punitive damages. Restitution is ‘‘a party’s unilateral unmaking of a contract for a legally sufficient reason, such as the other party’s material breach’’ and it in effect ‘‘restores the parties to their pre contractual position.’’ [Citation.] The restoration of the parties to their original position is incompatible with the circumstance when the complaining party is, at once, relieved of all obligations under the contract while simultaneously securing the windfall of compensatory and punitive damages beyond incidental expenses.

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   In sum, although whether appellants promptly repudiated the contract was not squarely before the court, we are not persuaded by appellees’ assertion that appellants did not seek rescission in a timely fashion. We hold that, under the facts of this case, appellants must elect the form of relief, i.e., damages or rescission * * *

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   We hold that * * * the appellants are entitled to be awarded punitive damages resulting from Craig’s actions. A ‘‘[p]laintiff seeking to recover punitive damages must allege in detail in the complaint the facts that indicate the entertainment by defendant of evil motive or intent.’’ [Citation.] The Court of Appeals has held that ‘‘punitive damages may only be awarded in such cases where ‘the plaintiff has established that the defendant’s conduct was characterized by evil motive, intent to injure, ill will or fraud. * * * ’’’ [Citation.] In cases of fraud that arise out of a contractual relationship, the plaintiff would have to establish actual malice to recover punitive damages. [Citation.] Finally, we have stated that ‘‘actual or express malice requires an intentional or willful act (or omission) * * * and ‘has been characterized as the performance of an act without legal justification or excuse, but with an evil or rancorous motive influenced by hate, the purpose being to deliberately and willfully injure the plaintiff.’’’ [Citation.]

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   The jury believed that the representations made by Craig were undertaken with actual knowledge that the representations were false and with the intention to deceive appellants. * * * Moreover, the record reflects that the jury could reasonably infer Craig’s intention to defraud appellants by her representation in the Disclosure Statement that there were no problems with the water supply, and by subsequently making substantial changes in the water system by cutting off a water line which supplied water to appellants’ residence immediately after appellants’ inspector examined the system. Therefore, we hold that the circuit court was not in error in finding facts from the record sufficient to support an award of punitive damages.

   Craig also challenges the punitive damages award on the basis that the amount of the award was excessive. * * *

   In the case at hand, the trial judge undertook the appropriate review of the jury’s award. It is clear from the court’s comments at the hearing that the court’s decision not to disturb the jury’s verdict was based on the evidence presented at trial and was not excessive. * * * Craig’s conduct toward appellants was reprehensible and fully warranted punitive damages. Her conduct in willfully misrepresenting the condition of the water system in the Disclosure Statement, coupled with her actions and those of her husband in interfering and diverting the water flow subsequent to the inspection and sale of the property, constitute egregious conduct. As a result of Craig’s conduct, appellants were forced to employ extreme water conservation practices due to an insufficient water supply and they attempted to ameliorate the problem by having two new wells drilled on the property which proved to be unproductive. Moreover, the lack of water supply to appellants’ property clearly reduced its market value. * * *

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   * * * Consequently, should appellants seek compensatory and punitive damages on remand, appellants’ actual knowledge, coupled with the intent to deceive, is a sufficient factual predicate for submission of punitive damages to the jury.

   Judgement of the circuit court reversed; case remanded for further proceedings consistent with this opinion.