rescission

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Rescission

The act of abolishing a contract and restoring, as far as possible, the status quo ante. While legal systems differ on the precise reasons for which a contract may be rescinded, it may occur due to an act of God or by mutual consent, provided that no substantial progress has been made toward completion of the contract. In the context of finance and economics, some contracts may be rescinded up to a certain point after they come into effect. For example, some mortgage refinance contracts allow the homeowner a period of three business days after signing the contract in which he/she may unilaterally rescind it. Likewise, the sale of land may be rescinded by either party up to the point the sale is recorded. Sometimes an option contract, especially a stock option, can be rescinded for a certain time after its exercise; in this situation, the person who exercised the option surrenders the underlying in exchange for the cash he/she paid for it.

rescission

The cancellation of a previous exercise of an incentive stock option, generally because of a substantial drop in the price of the stock acquired through the exercise. Rescission results in the employee surrendering stock in exchange for money that was paid for the stock.

rescission

See rescind.

References in periodicals archive ?
1) Attempting to limit a buyer's special and consequential damages remedies under a sales contract, as in Hardwick, and accepting the attendant possibility that such limitation may ultimately prevent the developer's exemption from ILSA, and result in rescission rights for prior purchasers, as well as penalties from HUD or civil actions from prior purchasers, based on exposure to the economic risk analysis suggested by Hardwick; such provision may state, for example:
As a result of the delays, a provision of the condominium offering plan required the developer to offer rescission rights to purchasers.
Gibson allowed his rescission rights to expire unexercised on December 31, 2002;
OTCBB:LQTK) Monday announced that it has reached agreement with representatives of Distech Limited for a six-month extension of the rescission rights contained in the agreement under which Liquitek is acquiring Distech.
The amended agreement allows the capital formation to continue through March 31, 2002, before the rescission rights may be exercised.
Together with the standard rescission rights contained in any home equity loan, the benefits to consumers include potential tax write-offs for home equity loan interest, increased loan payoff flexibility, competitive fixed or variable rates, and no down payment.
In that Note, the Company states that it is currently negotiating with all holders of the Series B convertible preferred stock described in the 10-K filing to obtain waivers of certain redemption or rescission rights in order to further increase its net tangible assets and help ensure the Company's compliance with Nasdaq listing requirements.