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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 When a contract is rescinded, both parties are restored to the status quo before the contract was entered (as much as possible).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• Acontract may be rescinded if there was fraud in the inducement, meaning a fraud with the underlying transaction and not with the nature of the contract or document signed.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 ?
There is some concern in industry circles that the decision may open up the floodgates for borrowers seeking to rescind their mortgages.
Although plaintiff may have the right to rescind, the question of whether the global economic crisis of 2008 serves as a ground for rescission remains.
Among them are the different effective dates for different provisions, the new reportable transactions understatement penalty under CRTC [section] 19773, the eight-year extended statute of limitations under CRTC [section] 19755 for abusive tax shelter transactions, the non-economic substance transaction penalty under CRTC [section] 19774, and the statute's providing that the FTB Chief Counsel's decision not to rescind certain penalties is nonreviewable.
If a company completes a pooling of interests, it must rescind existing stock repurchase plans and forgo stock repurchases for up to two years.
We would be happy to work with committee staff on such an alternative, although I am not confident that high-cost mortgage borrowers who may desperately need credit would be any more likely to rescind their loans with greater disclosures about rescission or a longer "cooling-off" period than they are now.
1 believe they will consider whether or not they want to rescind the ordinance or part of the ordinance or do something else.
The IRS may rescind any portion of the penalty if (1) the violation does not involve a listed transaction; and (2) rescinding the penalty would promote compliance and effective tax administration.
Despite being told that the process was successful and efficient, the provincial council meeting here in late September, heard enough reservations about the confidentiality of the vote and the impersonal nature of e-mail elections to rescind the protocol.
That coverage is likely to be challenged by the insurers, which probably will move to rescind their policies with WorldCom, based on what appears to be either fraud or intentional misleading on WorldCom's part, Hartwig said.
Inform the patient that he or she has an opportunity to rescind the request at any time, in any manner.
Eastman decided to rescind the increase, and a key company source said he did not foresee another attempt any time soon.
When the purchaser learned of this reputation, he sought to rescind the contract and secure the return of his $32,500 down payment.