Right of rescission


Also found in: Dictionary, Thesaurus, Medical, Legal, Acronyms.

Right of rescission

The right to void a contract without any penalty within three days as provided in the Consumer Credit Protection Act of 1968.

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 While legal systems differ on the precise reasons for which a contract may be rescinded, it may occur due to an act of God or by mutual consent, provided that no substantial progress has been made toward completion of the contract. In the context of finance and economics, some contracts may be rescinded up to a certain point after they come into effect.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 Likewise, the sale of land may be rescinded by either party up to the point the sale is recorded. Sometimes an option contract, especially a stock option, can be rescinded for a certain time after its exercise; in this situation, the person who exercised the option surrenders the underlying in exchange for the cash he/she paid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.
Mentioned in ?
References in periodicals archive ?
The court then distinguished Beach, noting that it had addressed the issue of whether a borrower who had never taken any action to rescind within the three-year period could assert rescission as a defense rather than the issue of how such a right of rescission must be exercised in the first place.
84) After acknowledging the language of Regulation Z and the potential interpretation that notice is sufficient to preserve the right of rescission, the court reasoned that while the regulation does outline one requirement of rescission, it does not lay out all requirements for successful accomplishment of rescission.
91) Accordingly, the Court there had decided only that the statute of repose barred exercise of the right of rescission after three years without deciding how a borrower could properly exercise such a right within the three-year period.
Counsel representing defrauded investors should be aware that the Florida Securities Act provides a three-day right of rescission to investors that purchase securities in a private placement to five or more persons in Florida.
Using the right of rescission against abusive practices may have been the equivalent of using a hammer to drive a screw, but it was all they had.
And under the new system, most of the old pitfalls would still exist: the three-year right of rescission remains in place, there is no mention of the "direct recourse before civil action" concept, and there is no mention of shaping penalties to reflect actual harm suffered by consumers.
Everybody's looking for a right of rescission," she said.
Already, buyers at Long Island City's Crescent Club were offered the right of rescission this winter that the developer, NCF Equities, missed the promised delivery date, according to Prudential Douglas Elliman Senior Vice President Avi Voda, who is handling sales at the 130-unit building.
He would not disclose how many buyers decided to exercise their right of rescission.
Buyers who claim they were improperly denied their right of rescission could also file a complaint with the New York State Attorney General's office, said Allison Scollar, the head of the real estate practice at the Manhattan-based firm Guzov Ofsink.
If the substitution of the sponsor, one entity for the other, is not something that adversely affects the purchasers, then it's possible there would be no right of rescission dictated in that situation," she said.