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Rescission may be Permissible in NV 6 Year SOL

Rescission may be Permissible in NV 6 Year SOL

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Published by Stephen Carr
Rescission and the unilteral mistake rule
Rescission and the unilteral mistake rule

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Published by: Stephen Carr on Feb 01, 2012
Copyright:Attribution Non-commercial


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I don't know if this is still good law; there's no date. Interpretations of TILA incertain jurisdictions have held that the statute of limitations begins at the date of discovery of the violation, not the date of the violation.The recitation below is from a Nevada case, case name and year unknown, so it isinformative but not reliable:Rescission is Permissible in Residential Mortgage Transactions
“In section II.1.c. of the Motion, the Defendant alleges that the Plaintiff does not have aclaim for rescission. In Nevada, there is a six year statute of limitations for rescinding acontract. Mackintosh v. California Federal Sav. & Loan Ass’n, 113 Nev. 393, 404 (Nev.1997), citing NRS 11.190(1)(b). The Plaintiff’s loan is only three years old, so rescissionis available.Moreover, in Nevada, the right of rescission has been extended to land sale contracts andtheir accompanying mortgages if fraud or deceptive practices are involved. See Ford v.Wertheimer, 79 Nev. 447, 448-49 (Nev. 1963) (“The plaintiffs were entitled torescission” of their mortgage “by reason of the fraudulent representations of thedefendants”). Moreover, as set forth above, TILA’s statutory time limits are tolled whenfraud or deceptive practices may be involved.Therefore, the Plaintiff has rescission claims. Nevada also recognizes the unilateral mistake rule found in the Restatement (Second) of Contracts, which allows for rescission when “a mistake … at the time of contract wasmade as to a basic assumption … which … has a material effect on the agreed exchangeof performances that is adverse to him [who made the mistake]… and (b) the other partyhad reason to know of the mistake or his fault caused the mistake.” Home Savers, Inc. v.United Sec. Co, 103 Nev. 357, 358-59 (Nev. 1997), quoting Restatement (Second) of Contracts, § 153 (1981).By withholding all the proper disclosures from the Plaintiff, the Defendant wasresponsible for its misrepresentations of the Transaction, something the Defendant knewor should have known.As a result, the Plaintiff may rescind her loan, under TILA, Nevada statutes, and Nevadalaw.Accordingly, the Motion should be denied.
The Nevada Deceptive Trade Practices Act Provides for a Private Cause of Action
In two short paragraphs, the Defendant seeks to dismiss the Plaintiff’s Deceptive TradePractices Act claim by arguing that “the statutory scheme does not provide for a privateright of action.” See Motion, p. 8. In these transactions, the Plaintiff was charged at least$22,729.22 for services related to his loan. Those fees did not culminate in services thatadequately disclosed the loan’s terms in accordance with TILA and RESPA. As such, the

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