A Tennessee timeshare developer wants to include a clause in its purchase contracts stating: 'Purchaser acknowledges that they have reviewed all required disclosures and voluntarily waive any right to rescind this agreement.' Under the Tennessee Timeshare Act, what is the legal effect of this clause?
Correct Answer
C) The clause is void and unenforceable because the statutory five-day rescission right cannot be waived by contract
Under the Tennessee Timeshare Act, Tenn. Code Ann. § 66-32-114, the buyer's five-day right to rescind a timeshare contract is a mandatory statutory protection that cannot be waived by contract, regardless of how the waiver is worded or whether the buyer signs or initials it. Any contractual provision purporting to waive or limit this right is void and unenforceable as a matter of Tennessee law. The developer's attempt to include such a clause would itself be a violation of the Act.
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Related Topics & Key Terms
Key Terms:
Related Concepts
A tie-in arrangement is an illegal antitrust practice in which a seller conditions the purchase of one product or service on the buyer's agreement to purchase a separate product or service.
A trust account, also called an escrow account, is a separate bank account maintained by a broker to hold funds belonging to others, such as earnest money deposits, security deposits, or other client funds.
Advertising regulations govern how real estate licensees may market properties and services, requiring truthful, non-deceptive advertising that includes proper identification of the brokerage.
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