What is the name of the cancellation of a contract, particularly relevant to refinancing?

The correct term for the cancellation of a contract in the context of refinancing is "rescission." This term specifically refers to the legal right of a borrower to cancel a mortgage transaction within a certain period, usually three days, after closing. This right is often granted under the Truth in Lending Act (TILA), which aims to protect consumers during refinancing and home equity loan transactions by ensuring they have a specified timeframe to reconsider their decision.

Rescission provides borrowers with a crucial safeguard, allowing them the opportunity to back out of a deal if they feel uncomfortable or if they find better options. It underscores the importance of transparency and buyer protection in financial transactions, especially those involving significant sums of money like mortgages.

The other terms, while related to contract law, do not specifically pertain to the context of refinancing. "Abolition" typically refers to the act of ending something completely, which isn't specifically applicable to individual contracts. "Nullification" is a broader term that can involve declaring something void, but it does not convey the specific rights afforded to borrowers under refinancing. "Termination" refers generally to ending a contract, but it does not provide the same consumer protection framework that rescission does in the realm of refinancing and mortgage contracts.