Question 1

What additional disclosures must be made in credit transactions in which the debtor's home will serve as security for the loan?

Accepted Answer

Under the amendments to TILA covering home mortgages, the loan documents must make clear the fact that default could lead to foreclosure and loss of the home.

Question 2

A seller recovering the difference between his resale price and the buyer's original contract price is an example of:

Accepted Answer

A) compensatory damages. 
B) incidental damages. 
C) liquidated damages. 
D) None of the above 
A) compensatory damages. 
B) incidental damages. 
C) liquidated damages. 
D) None of the above A

Question 3

A bill of lading is a receipt for shipment issued by the seller.

Accepted Answer

A) True 
 B)False  False

Question 4

Liquidated damages are void as penalties.

Accepted Answer

A) True 
 B)False

Question 5

Force majeure clauses:

Accepted Answer

A) are liquidated damages clauses. 
B) are void. 
C) serve to shift the risk of unforeseen events. 
D) None of the above 
A) are liquidated damages clauses. 
B) are void. 
C) serve to shift the risk of unforeseen events. 
D) None of the above

Question 6

The Hoffmans were having their home remodeled by All-Right Contractors. The roof had to be removed in order to build the second story the Hoffmans had contracted and designed to build. After All-Right had removed the roof, but before a covering was placed over the exposed half of the home, All-Right's foreman said the job would cost an additional $12,500. The Hoffmans refused to agree to the additional fees and All-Right's foreman said, "Suit yourselves. Looks like rain for the next day or two," and left. The Hoffmans called All-Right and agreed to pay the $12,500 extra and went in to sign the paperwork. Which of the following statements is true?

Accepted Answer

A) The contract for the additional $12,500 is valid and binding. 
B) The contract for the additional $12,500 is invalid because of duress. 
C) The contract was not valid because of duress, but the Hoffmans signed anyway - so there is a valid and enforceable agreement. 
D) None of the above 
A) The contract for the additional $12,500 is valid and binding. 
B) The contract for the additional $12,500 is invalid because of duress. 
C) The contract was not valid because of duress, but the Hoffmans signed anyway - so there is a valid and enforceable agreement. 
D) None of the above

Question 7

Misrepresentation does not require proof of the buyer's reliance.

Accepted Answer

A) True 
 B)False

Question 8

Which of these is not a contract defense?

Accepted Answer

A) Capacity 
B) Duress 
C) Fraud 
D) Rejection 
A) Capacity 
B) Duress 
C) Fraud 
D) Rejection

Question 9

A multi-million dollar contract between a manufacturer and a parts supplier provides for damages of $300 per day for late delivery is void as a penalty contract.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following statements in a letter from a collector to a debtor would be a violation of FDCPA?

Accepted Answer

A) "We will be contacting your employer to let him know of this problem." 
B) "We will file suit if payment is not made within 30 days." 
C) "We will be calling you at your home." 
D) All of the above are violations. 
A) "We will be contacting your employer to let him know of this problem." 
B) "We will file suit if payment is not made within 30 days." 
C) "We will be calling you at your home." 
D) All of the above are violations.

Question 11

Paula Sanford has filed a voluntary petition in bankruptcy. Paula has a job but admits that she is in over her head on credit card debt. The bankruptcy court:

Accepted Answer

A) can allow Paula to declare bankruptcy because she has debts. 
B) can allow Paula to declare bankruptcy but Paula may have to go into a Chapter 13 debt adjustment plan. 
C) has no remedies for consumers with only credit card debt. 
D) None of the above 
A) can allow Paula to declare bankruptcy because she has debts. 
B) can allow Paula to declare bankruptcy but Paula may have to go into a Chapter 13 debt adjustment plan. 
C) has no remedies for consumers with only credit card debt. 
D) None of the above

Question 12

For a contract to be void, scienter is required.

Accepted Answer

A) True 
 B)False

Question 13

Rescission would be allowed in a contract that involved:

Accepted Answer

A) exculpatory clauses. 
B) material misrepresentation. 
C) puffing. 
D) scienter . 
A) exculpatory clauses. 
B) material misrepresentation. 
C) puffing. 
D) scienter .

Question 14

Explain the purpose of a force majeure clause.

Accepted Answer

Its purpose is to excuse perfo

Question 15

The doctrine of substantial performance applies in construction contracts.

Accepted Answer

A) True 
 B)False

Question 16

Covenants not to compete are void only in sale-of-business contracts.

Accepted Answer

A) True 
 B)False

Question 17

Undue influence requires proof of a confidential relationship.

Accepted Answer

A) True 
 B)False

Question 18

In most states the legal age capacity for contracts is ___ years old.

Accepted Answer

A) 21 
B) 16 
C) 18 
D) 17 
A) 21 
B) 16 
C) 18 
D) 17

Question 19

Bob, age 17, has entered into a contract to buy a car. The contract is:

Accepted Answer

A) voidable. 
B) void. 
C) voidable only if Bob can return the car. 
D) enforceable since it is for a necessary. 
E) None of the above 
A) voidable. 
B) void. 
C) voidable only if Bob can return the car. 
D) enforceable since it is for a necessary. 
E) None of the above

Question 20

Bank One wrongfully dishonored a check that its customer, Brian, had written.  Their contract provided that Bank One would timely honor checks when there were sufficient funds in Brian's account.  Brian had sufficient funds, but a bank employee had made an error in transposing account numbers.  As a result, Brian's mortgage payment was late and he owed a late fee of $35.  Who must pay the $35 late fee?

Accepted Answer

A) Brian 
B) The mortgage company 
C) Bank One 
D) Brian and Bank One must split the fee 
A) Brian 
B) The mortgage company 
C) Bank One 
D) Brian and Bank One must split the fee

What additional disclosures must be made in credit transactions in which the debtor's home will serve as security for the loan?

A seller recovering the difference between his resale price and the buyer's original contract price is an example of:

A bill of lading is a receipt for shipment issued by the seller.

Liquidated damages are void as penalties.

Force majeure clauses:

Misrepresentation does not require proof of the buyer's reliance.

Which of these is not a contract defense?

A multi-million dollar contract between a manufacturer and a parts supplier provides for damages of $300 per day for late delivery is void as a penalty contract.

Which of the following statements in a letter from a collector to a debtor would be a violation of FDCPA?

Paula Sanford has filed a voluntary petition in bankruptcy. Paula has a job but admits that she is in over her head on credit card debt. The bankruptcy court:

For a contract to be void, scienter is required.

Rescission would be allowed in a contract that involved:

Explain the purpose of a force majeure clause.

The doctrine of substantial performance applies in construction contracts.

Covenants not to compete are void only in sale-of-business contracts.

Undue influence requires proof of a confidential relationship.

In most states the legal age capacity for contracts is ___ years old.

Bob, age 17, has entered into a contract to buy a car. The contract is:

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Exam 11: Contracts and Sales: Performance, Remedies, and Rights

What additional disclosures must be made in credit transactions in which the debtor's home will serve as security for the loan?

A seller recovering the difference between his resale price and the buyer's original contract price is an example of:

A bill of lading is a receipt for shipment issued by the seller.

Liquidated damages are void as penalties.

Force majeure clauses:

Misrepresentation does not require proof of the buyer's reliance.

Which of these is not a contract defense?

A multi-million dollar contract between a manufacturer and a parts supplier provides for damages of $300 per day for late delivery is void as a penalty contract.

Which of the following statements in a letter from a collector to a debtor would be a violation of FDCPA?

Paula Sanford has filed a voluntary petition in bankruptcy. Paula has a job but admits that she is in over her head on credit card debt. The bankruptcy court:

For a contract to be void, scienter is required.

Rescission would be allowed in a contract that involved:

Explain the purpose of a force majeure clause.

The doctrine of substantial performance applies in construction contracts.

Covenants not to compete are void only in sale-of-business contracts.

Undue influence requires proof of a confidential relationship.

In most states the legal age capacity for contracts is ___ years old.

Bob, age 17, has entered into a contract to buy a car. The contract is:

Introduction to Law

Business Ethics and Social Responsibility

The Court System and Dispute Resolution

Business and the Constitution

Administrative Law

International Law

Business Crime

Business Torts

Environmental Regulation and Sustainability

Contracts and Sales: Introduction and Formation

Business Marketing and Products: Ads and Product Safety

Business Competition: Antitrust Law

Business and Intellectual Property Law

Agency Law

Governance and Structure: the Law of Business Associations

Governance and Regulation: Securities Law

Business and Employees: Employment Regulation

Business and Employees: Employment Discrimination

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