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To cancel a contract because of misrepresentation, fraud, or illegal procedure.


To cancel a contract and declare it invalid from its beginning. When a contract is rescinded, both parties are restored to the status quo before the contract was entered (as much as possible). Rescission may occur by mutual agreement, or when one of the parties misrepresented himself/herself before the contract was signed.


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• Acontract may be rescinded if there was fraud in the inducement, meaning a fraud with the underlying transaction and not with the nature of the contract or document signed.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.

References in periodicals archive ?
Regarding to the decision to rescind, the stock sales and purchase agreement of 15,880,487 as above stated is now under negotiation, and its Letter of Intent was signed on August 18, 2008 between Mr.
An attorney for a Reseda strip club threatened Wednesday to file a federal civil rights lawsuit unless the city rescinds a vote taken this week to move toward closing the facility.
Bubb, vice president of strategic development for BP Oil Company, said, "We've been unsuccessful at selling our properties in California at full value and will rescind so that BP and its marketers can continue operations beyond February.
LaBonge wants to rescind a voter-approved 1998 measure that prevents the use of local sales tax revenue to build subways - a ban imposed during the construction problems on the Red Line.
But, the FCC, after lengthy evaluation, decided it should rescind both GTE's operating authority and waiver.
If they rescind the ban, I see no reason why we would not rescind our cancellation,'' Oppenheimer said.
In the action, plaintiffs sought to compel Parallel to accept stock subscriptions from certain investors or, alternatively, to rescind the transactions.
The schools are facing tough decisions after the LAUSD school board this month decided to rescind employee furloughs and fully fund increases in staff health benefit costs.
This hearing was canceled after the state announced its intent to rescind the subcontract and its layoff notices to the Resident Care Aides.
California's 20-member Republican congressional delegation called Tuesday on Davis to rescind the driver's license bill he signed last week, and threatened a recall of the measure if he does not.
To settle an age-discrimination complaint filed against it with the state, the LAPD has agreed to rescind its rule limiting new recruits to those 40 or younger.