What Is Rescission?
Video Summary: Explaining the term “rescission” with an example of rescission offers with a non-traded REIT.
Rescission is a measure of damages that allows an investor to effectively rescind the deal. So it’s a very important measure of damages for investors who are stuck in illiquid investments because it would be very difficult to determine what the damages are. So if you've been sold, for example a non-traded wheat or non-traded real estate investment trust, which is a very common investment sold to investors that they probably should not be in, the investment be almost impossible to determine what your damages are because there are no buyers for it.
So rescission allows an investor to go back to the brokerage firm or the investment advisor that sold in the investment and rescind the deal effectively, give back the investment, and receive back the money that you paid for it.