Final answer:
A right of rescission clause allows a party to cancel or terminate a contract within a specified timeframe and be refunded any amounts paid.
Step-by-step explanation:
A right of rescission clause is a provision that allows a party to a contract to cancel or terminate the agreement within a specified timeframe. It is commonly found in contracts such as real estate leases, mortgage agreements, and certain sales contracts. The clause gives the party the right to rescind or undo the contract and be refunded any amounts paid.
For example, if a tenant enters into a lease agreement and discovers significant issues with the property within a specified period after signing the lease, they may be able to exercise the right of rescission and terminate the agreement without penalty.