Ben Entered into a Contract with Clooney Construction Inc

question 46

Multiple Choice

Ben entered into a contract with Clooney Construction Inc. under which Clooney agreed to do $40,000 worth of remodeling of his home. Clooney agreed that the contract price could be paid in installments, and that to secure these payments, Clooney would take out a second mortgage on Ben's home. The day after signing the contract, Ben had second thoughts and immediately hand-delivered a written notice to Clooney stating that he wanted to rescind the contract. Which of the following statements is true of this case?

• A) Ben can rescind the contract under the rescission right of the Truth in Lending Act.
• B) Ben cannot rescind the contract because the transaction involved more than $25,000 and was, therefore, not covered by the rescission right in the Truth in Lending Act.
• C) Ben cannot rescind because the rescission right in the Truth in Lending Act does not apply to transactions in which the creditor takes a mortgage to secure the loan.
• D) Ben can rescind the contract under the seller's right to cancel the right provided by the Truth in Lending Act as their house was not used as collateral.

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Definitions:

World Price

The internationally determined price of a good or service, influenced by global supply and demand factors.

Import or Export

Imports are goods and services brought into a country from abroad for sale, while exports are goods and services produced domestically and sold to foreign countries.

World Price

A product or service's worldwide market value, affected by the international balance of supply and demand.

Importer or Exporter

An entity that buys goods and services from a foreign country (importer) or sells them to a foreign country (exporter).