Contracts
What is a rescission right under the federal Consumer Credit Protection Act?
AA right to cancel any real estate contract within 3 days
BA 3-day right to cancel certain refinance transactions where the home is used as collateral✓ Correct
CA right to cancel a purchase contract after inspection
DA government cancellation program
Explanation
Under TILA (Regulation Z), borrowers have a 3-day right of rescission (cancellation) for refinance transactions using their primary residence as collateral. This right does NOT apply to purchase transactions for a primary home.
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Key Terms to Know
Option Contract
A contract giving the buyer the right, but not the obligation, to purchase a property at a specified price within a specified time period.
Earnest MoneyA deposit made by the buyer when submitting a purchase offer, demonstrating serious intent and serving as consideration for the contract.
ContingencyA condition in a purchase contract that must be satisfied before the sale can proceed to closing.
Purchase AgreementA legally binding contract between a buyer and seller that outlines the terms and conditions of a real estate sale.
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