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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 When a contract is rescinded, both parties are restored to the status quo before the contract was entered (as much as possible).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• Acontract may be rescinded if there was fraud in the inducement, meaning a fraud with the underlying transaction and not with the nature of the contract or document signed.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 ?
According to Reuters, Delta Air Lines, American Airlines, United Airlines, Continental Airlines and Northwest Airlines said on 30 October that they rescinded the increases over the weekend (28-29 October).
TB 43-0240 was created just for Desert Storm and as you point out was later rescinded.
This penalty can only be rescinded by the FTB Chief Counsel if (1) imposing the penalty would be against equity and good conscience; and (2) rescinding the penalty would promote compliance with the tax laws and effective tax administration.
However, Bishop Donald Harvey of Eastern Newfoundland and Labrador, who abstained from the original vote in protest, moved that the e-mail protocol be rescinded and that the provincial canons be amended to make such a vote unnecessary in the future.
Using a sample of 39 companies that rescinded their stock repurchase plans between November 1995 and June 1998 to preserve pooling treatment, we compared the costs and benefits of pooling vs.
We contacted the United States Information Agency (USIA), which is responsible for administering the J-1 program, in April to express our concern over the new regulations and to request that the two year limitation be rescinded.
At press time, it did TABULAR DATA OMITTED not appear that any supplier had rescinded those increases, but several indicated they will be pushed back to a later date--most likely October 1.
Pink Sheets: FJIC) announced today it has rescinded the purchase of Fuji Construction Company of Japan.
Pauly, provost, said the offer to O'Brien was rescinded because after further review of "cumulative published records of the candidates, particularly as they relate to Catholic mission and identity, subsequent discussion raised issues that had not been fully addressed earlier.
We proposed that either the ordinance be rescinded or at least a part of the ordinance that deals with adult bookstores and video stores be rescinded," Brenner said.
Recently, the state Department of Managed Health Care fined Blue Cross $200,000 in response to a case of coverage for a patient that was improperly rescinded.
The penalty can be rescinded or abated for reportable transactions in exceptional circumstances.