Exam 13: Contracts: Performance, Remedies, and Rights

The Jameses were negotiating the purchase of the Smith's home but requested a termite inspection. The inspection came back clear from ABC Bug, Inc. The Jameses bought the house and immediately began to notice signs of termite infestation. They called Goodbye Bug, Inc., and their technician confirmed significant termite infestation and damage. The technician said he had inspected the home for the Smiths just a few weeks earlier, but was never asked to repair and exterminate. The Jameses want out of the house and the contract. Do they have a basis?

Under the Bankruptcy Reform Act of 2005, consumers can always file for liquidation proceedings without going through Chapter 13.

RaeAnn and Rick Telford purchased an existing home in a neighborhood of multi-million-dollar homes. After moving in, the Telfords learned that the home had been owned formerly by a couple that was indicted for drug trafficking. The home had been raided by DEA agents, and there had been a shoot-out before the couple was taken into custody. The couple's youngest child was killed in the house during the shoot­out. RaeAnn and Rick:

The failure to deal fairly with a party to a contract can result in damages for breach.

Clothing For Accountants is a popular retail store owned by I.M. Material. Material has just sold the business to Phil Forma. Phil has asked that a covenant not to compete be inserted into the agreement. Such covenants are:

A contract signed at home for the installation of a pool under a 90-days-same as cash agreement is not subject to the 3-day rescission period.

The Bankruptcy Reform Act of 2005 made it easier for consumers to declare bankruptcy.

In order to recover damages under the Fair Credit Billing Act, the debtor must:

Regulation Z provides the details of compliance with the Fair Credit Billing Act.

Material information is something that would affect the decision to buy or sell.

A minor's right to disaffirm a contract is conditioned on:

Morality clauses in contracts are both illegal and unethical.

Under the FCRA, the 100-word statement allows debtors to clarify their past credit experiences.

Under the FDCPA, collectors identified as such can use postcards to contact debtors.

Explain the purpose of a force majeure clause.

An architect who fails to pay her annual license renewal fee will be unable to collect fees for work done until the renewal fee is paid.

Using what you have learned about consumer credit, develop a credit application that would comply with all federal statutes and regulations.

A minor who has received medical care can never be responsible for payment for those services.

Home equity loans do not carry a rescission period.

Which of the following is prohibited in the collection of consumer debt by the Fair Debt Collections Practices Act?