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To withdraw or undo.The act itself is called rescission. If a party has a right of rescission, the party may rescind a transaction.Important rescission rights include the following:
• Under the Truth-in-Lending Act, consumers may rescind a loan transaction if the lender failed to provide all required disclosures.
• Certain state laws give homeowners the right to rescind sales contracts for properties in danger of foreclosure.
• Most states still allow insurance companies to rescind policies if there was a fraud in the representations made to secure the policy.
• Acontract may be rescinded if there was fraud in the inducement, meaning a fraud with the underlying transaction and not with the nature of the contract or document signed.
• Under the Truth-in-Lending Act, consumers refinancing their principal residence or taking out a home equity line of credit may, with certain exceptions, rescind the loan within 3 business days and not owe any interest or fees.