DMV DMV - Representative Consumer Protection and Dispute Resolution 2

Question 1

If a buyer signed a contract under economic duress or fraudulent misrepresentation, which legal remedy allows them to cancel the contract and be restored to their original position?

Accepted Answer

Rescission

Answer

Rescission cancels a contract and restores both parties to their pre-contract positions, and it is available when a contract was induced by fraud or duress.

Question 2

Under the FTC's Holder Rule, if a buyer finances a vehicle purchase through dealer-arranged financing, their claims against the dealer:

Accepted Answer

Can also be asserted against the assignee finance company

Answer

The FTC Holder Rule requires that any holder of a consumer credit contract (assignee finance company) be subject to the same claims and defenses the buyer has against the dealer.

Question 3

A California dealer who charges a buyer more than the advertised price for a vehicle is in violation of:

Accepted Answer

California Vehicle Code Section 11713.1(a)

Answer

CVC 11713.1(a) prohibits a licensed dealer from selling a vehicle at a price higher than the advertised price.

Question 4

A 'cooling-off period' that allows a buyer to cancel a vehicle sale typically applies to which type of transaction in California?

Accepted Answer

Vehicle sales conducted away from the dealer's lot (e.g., off-premises sales)

Answer

California's 3-day right to cancel under the Home Solicitation Sales Act applies to sales made away from the seller's regular place of business, not typical dealership sales.

Question 5

The Truth in Lending Act (TILA) requires dealers arranging financing to disclose the Annual Percentage Rate (APR) and finance charge primarily to:

Accepted Answer

The buyer before the contract is signed

Answer

TILA mandates that lenders and dealers disclose the APR, total finance charge, and total payment amount to the consumer before the credit contract is signed.

DMV - Representative Exam Practice Test

DMV - Representative Exam Practice Test

DMV DMV - Representative Consumer Protection and Dispute Resolution 2