(function (lambda (example) (if (= 0 (aref example i)) nil T)))

Why does this line of code give me an error that says:

Free reference to undeclared variable EXAMPLE assumed special.

(function (lambda (example) (if (= 0 (aref example i)) nil T)))

Why does this line of code give me an error that says:

Free reference to undeclared variable EXAMPLE assumed special.

What implementation of lisp are you using? The error should be that I was assumed special, since it wasn't declared with the lambda.