Right Of Rescission

• In some instances, you are entitled to a rescission period that begins immediately after you agree to a contract. The rescission period normally lasts for a number of days and the contract does not technically take effect until the rescission period has ended. You can rescind the contract at any time during the rescission period by signing a rescission document. When you do this, you cancel the contractual agreement and neither party is bound by the terms of the contract. The agreement effectively becomes null and void.
  
  

Contracts

• Contractual agreements generally involve two parties and a promise to exchange goods, services or money. You cannot waive a rescission period that you are entitled to under state or federal law. Some loan contracts are subject to rescission periods. To prevent unscrupulous individuals from spending loan proceeds and then rescinding the loan, lenders do not disburse funds until the rescission period has ended. This can cause a problem for someone who needs immediate access to funds.
  
  

Service Providers

• Some states, such as California, have laws that entitle you to a right of rescission for service contracts. However, you generally have to pay for the service upfront and the servicer must provide you with a refund if you rescind the contract. This can lead to legal disputes if the service provider proves unwilling or unable to offer a refund. In Oregon, you have a right of rescission when you buy goods from a door-to-door salesperson. However, this can lead to disputes if the seller claims that you have not returned the goods in working order. Therefore, rescission periods do not always work smoothly.
  
  

Rescission Periods

• Under federal law, you are entitled to a three day right of rescission when you refinance a home loan with a new lender. Rescission periods on other types of contracts vary from state to state. In Florida, you have a 48 hour right of rescission that begins with the birth of your child if you entered into a preplanned adoption agreement. In Oregon, door-to-door purchases are subject to a three day rescission period while in California you have 30 days within which to rescind a contract to buy a used car, an appliance or a service agreement from a telephone company.