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1.BUAD 3250 Test 2 Questions with Correct Answers
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1.BUAD 3250 Test 2 Questions with Correct Answers
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1.BUAD 3250 Test 2 Questions withCorrect Answers
Fourth Essential Element of a Contract - Answer-Legality of Contracts - All contracts
have to be for a lawful purpose. If a contract is prohibited by law or calls for the
performance of an illegal act or a tort then it is a void contract.
Truth in Lending Act - Answer-Any consumer financed transaction, that is, where credit
is extended to the consumer, for the most part has to follow the Truth In Lending Act.
This Act requires the party extending the credit to disclose certain information to the
consumer. I will give an example in class or on the video,s but the Act requires that the
following information be disclosed to the consumer:
1. The principal amount being financced;
2. The simple interest rate;
3. The Annual Percentage Rate (APR);
4. The number of payments and the amount of each payment and the total amount that
will be paid ;
5. Credit Life Insurance;
6. Any "Balloon" payments; and
7 All other finance charges.
Failure to comply with the Act will subject the offender to a penalty of twice the finance
charges plus attorney's fees to be paid to the consumer.
Bulk Sales Act - Answer-You should always consider using the Bulk Sales Ac whent
you are buying out an ongoing business. You cannot force a Seller to go through the
Act but you should think twice about buying the business if the Seler refuses to use the
Act.
!. 10 days prior to the sale the Seller should give to the Buyer a complete inventory of
what is being sold.
2. 10 days prior to the sale the Seller should give to the buyer an AFFIDAVIT, which is a
sworn statement listiing the name of each creditor he owes money to or who he will owe
maoney to, the address of the creditor and the amount owed that creditor.
, 3. 10 days prior to the sale the Buyer sends a "certified letter" to each creditor telling
them of the sale and the amount the Seller says is owed and if this is incorrect then the
creditor needs to notify the buyer before the sale.
4. 15 days prior to the sale the Buyer publishes in the local newspaper the facts
concerning the sale.
At the sale the Buyer deducts the debts of the seller, pays the existing creditors, and the
Seller gets the balance. This way the debts of the business being sold do not follow the
business.
Louisiana no-competition Act - Answer-A. (1) Every contract or agreement, or provision
thereof, by which anyone is restrained from exercising a lawful profession, trade, or
business of any kind, except as provided in this Section, shall be null and void.
(2) The provisions of every employment contract or agreement, or provisions thereof,
by which any foreign or domestic employer or any other person or entity includes a
choice of forum clause or choice of law clause in an employee's contract of employment
or collective bargaining agreement, or attempts to enforce either a choice of forum
clause or choice of law clause in any civil or administrative action involving an
employee, shall be null and void except where the choice of forum clause or choice of
law clause is expressly, knowingly, and voluntarily agreed to and ratified by the
employee after the occurrence of the incident which is the subject of the civil or
administrative action.
B. Any person, including a corporation and the individual shareholders of such
corporation, who sells the goodwill of a business may agree with the buyer that the
seller or other interested party in the transaction, will refrain from carrying on or
engaging in a business similar to the business being sold or from soliciting customers of
the business being sold within a specified parish or parishes, or municipality or
municipalities, or parts thereof, so long as the buyer, or any person deriving title to the
goodwill from him, carries on a like business therein, not to exceed a period of two
years from the date of sale.
C. Any person, including a corporation and the individual shareholders of such
corporation, who is employed as an agent, servant, or employee may agree with his
employer to refrain from carrying on or engaging in a business similar to that of the
employer and/or from soliciting customers of the employer wi
Redhibition - Purchase of a Defective Product - Answer-Art. 2520. Warranty against
redhibitory defects
The seller warrants the buyer against redhibitory defects, or vices, in the thing sold.
A defect is redhibitory when it renders the thing useless, or its use so inconvenient that
it must be presumed that a buyer would not have bought the thing had he known of the
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