In Baker v. Bank of America, N.A., No. 5:13-CV-92-F, 2014 U.S. Dist. LEXIS 9578 (E.D.N.C. Jan. 27, 2014), the United States District Court for the Eastern District of North Carolina held that even if a consumer timely exercises his or her right to rescind a loan transaction under the Truth in Lending Act (TILA), 15 U.S.C. § 1601, et. seq. — i.e., during the three-day statutory “cooling-off” period — that exercise does not automatically cause the loan to be rescinded. Rather, the court held, if a consumer’s notice of rescission is met with silence by the lender, the consumer must also file a lawsuit in order to complete the rescission before the statute of limitations expires (in this case, the statute of limitations was determined to be four years). The Baker case provides a thorough interpretation of the effect of the statutory three-day “cooling-off” period, for which, it was noted in the decision, case law is “exceedingly sparse.”
Continue Reading Does A Consumer’s Exercise of a Rescission Right Mean that the Loan Is Automatically Rescinded? Perhaps Not, According to One Federal Court, If the Consumer Does Not Also File a Lawsuit for Rescission
When Is a Non-Binding Term Sheet or Letter of Intent Enforced as a Binding Contract?
In almost all corporate transactions, the first piece of written documentation the parties exchange and execute (after a non-disclosure agreement) is a letter of intent or term sheet (“LOI”), which is intended to summarize the main deal points. And as many corporate transactions involve entities organized in Delaware, these documents often select Delaware as the governing law.Continue Reading When Is a Non-Binding Term Sheet or Letter of Intent Enforced as a Binding Contract?