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 While legal systems differ on the precise reasons for which a contract may be rescinded, it may occur due to an act of God or by mutual consent, provided that no substantial progress has been made toward completion of the contract. In the context of finance and economics, some contracts may be rescinded up to a certain point after they come into effect.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 Likewise, the sale of land may be rescinded by either party up to the point the sale is recorded. Sometimes an option contract, especially a stock option, can be rescinded for a certain time after its exercise; in this situation, the person who exercised the option surrenders the underlying in exchange for the cash he/she paid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 ?
through rescission rights to create incentives to take care, the remedy
Rescission rights are widely criticized, however, mainly because people
For example, consider the situation where a borrower admits knowledge of the right to cancel and admits a conscious decision not to exercise the rescission right in the three days or a week after a closing.
As a result, it was determined that the 1.6 million common units that were issued from March 8, 2016 to May 19, 2016, inclusive, under our ATM program may have a rescission right for an amount equal to the purchase price paid for the units, plus statutory interest and less any distributions paid, upon the return of the units to us.
The sponsors of Linden78, a 33-unit condominium at 230 West 78th Street, offered rescission rights to all of the project's buyers in mid-April, according to a statement provided exclusively to The Real Deal from the developer, Urban Residential.
"As a result of the delays, a provision of the condominium offering plan required the developer to offer rescission rights to purchasers."
An additional, important provision of ILSA grants an unconditional right of rescission to prospective purchasers, and specifies that with respect to the sale of any nonexempt lot, a purchaser may revoke the applicable contract for a period of seven days following the signing or for any longer period applicable by state law.[18] A developer should note that this rescission right applies even though a developer may have successfully complied with each of ILSA's registration provisions.
A condominium developer's ability to correctly interpret ILSA's provisions is essential in order to avoid financial exposure to proceedings by HUD and purchasers, most notably, the two-year rescission right, as well as to provide comfort to a construction lender concerned with the act's ramifications.