Rescission

Before being sued, a seller who discovers it sold a security in violation of the Uniform Securities Act sends the buyer a written rescission offer with interest. The buyer neither accepts nor rejects the offer. The buyer loses the right to sue on that sale:

1. A.30 days after receiving the rescission offerCorrect. Failing to act within 30 days of receipt bars the claim.
2. B.Immediately upon the seller mailing the offerWrong. The 30-day clock runs from the buyer's receipt, and the buyer has the full period to accept.
3. C.60 days after receiving the rescission offerWrong. Sixty days is the judicial-appeal window, not the rescission acceptance period.
4. D.Never; a rescission offer cannot affect the right to sueWrong. An unaccepted proper rescission offer bars later suit on that sale.

Why: No buyer may sue under the civil liability provision if, before suit, he received a written rescission offer with interest and failed to accept it within 30 days of receipt. Citation: Uniform Securities Act Sec. 410(e). Takeaway: 30 days to accept a rescission offer or the claim is extinguished.

A customer paid $10,000 for stock sold to her in violation of the Uniform Securities Act and received $400 in dividends while holding it. She sues within the limitations period and prevails, tendering the stock; the legal interest rate is 6% and she held the stock exactly one year. Excluding costs and attorney's fees, she recovers:

1. A.$10,200Correct. 10,000 + 600 - 400 = 10,200, plus costs and fees separately.
2. B.$10,000Wrong. Statutory interest at the legal rate is part of the recovery.
3. C.$9,400Wrong. This subtracts both dividends and interest, but interest is ADDED to the recovery.
4. D.$10,600Wrong-but-tempting. This ignores the required offset for the $400 of dividends received.

Why: The statutory rescission recovery is the consideration paid ($10,000), plus interest at the legal rate ($600 for one year at 6%), less income received on the security ($400), plus costs and reasonable attorney's fees, upon tender of the security: $10,200 before costs and fees. Citation: Uniform Securities Act Sec. 410(a)(1). Takeaway: add interest, subtract income received.