Which one of the following statements is correct regarding nonwaiver agreements
and reservation of rights letters?
A. Reservation of rights letters and nonwaiver agreements should generally be in
writing because oral notice may be too difficult to prove in court.
B. A reservation of rights letter is less effective than a nonwaiver agreement because
the letter is only effective at preventing claims of estoppel, not waiver or election.
C. A nonwaiver clause in an insurance application informs the applicant that the agent
may modify the terms of the policy before issue.
D. When an insurer knows of grounds for non-coverage and then decides to manage
the defense of a lawsuit against the insured, the insurer must discontinue the
investigation.
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, Reservation of rights letters and nonwaiver agreements should generally
be in writing because oral notice may be too difficult to prove in court
B is incorrect. A reservation of rights letter is a unilateral agreement, in that
it is not signed by the insured. However, a reservation of rights letter can be
as effective as a nonwaiver agreement (which is signed by the insured),
provided the letter has been drafted carefully, and the insurer can prove
that the insured received the letter.
C is incorrect. The nonwaiver clause in an insurance application informs the
applicant that the agent may not modify the terms of the policy.
D is incorrect. When an insurer knows of grounds for non-coverage and
then decides to manage the defense of a lawsuit against the insured, the
insurer cannot refuse coverage on those grounds unless the insurer
provided timely notice of its reservation of rights.
Christina loaned Mikaela $1,000. In return, Mikaela gives Christina title to her car as
collateral. This is an example of a:
A. Conditional sale.
B. Debtor lien.
C. Chattel mortgage.
D. Pledge.
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Chattel mortgage.
Which one of the following best describes a conditional sale?
A. A seller receives cash equal to the fair market value of the property being sold.
B. A debtor delivers goods for a creditor to hold as security until payment has been
made
C. A creditor lends money to a debtor, who uses the money to purchase an item
, D. A debtor retains possession of property while a creditor retains the right to take
ownership of the property.
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A creditor lends money to a debtor, who uses the money to purchase an
item.
A is incorrect. This is an example of an actual sale.
B is incorrect. This is an example of a pledge.
D is incorrect. This is an example of a chattel mortgage.
The justification for imposing strict liability on those who carry on ultrahazardous
activities is that they have, for their own purposes:
A. Committed a breach of warranty.
B. Created an unusual risk in the community.
C. Created a fatal situation for invitees.
D. Lowered surrounding property values.
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Created an unusual risk in the community.
Which one of the following cannot be discharged in bankruptcy?
A. Credit card debt.
B. Unsecured claims of governmental units.
C. Debts incurred in court actions arising from drunk driving.
D. Unsecured business debts.
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and reservation of rights letters?
A. Reservation of rights letters and nonwaiver agreements should generally be in
writing because oral notice may be too difficult to prove in court.
B. A reservation of rights letter is less effective than a nonwaiver agreement because
the letter is only effective at preventing claims of estoppel, not waiver or election.
C. A nonwaiver clause in an insurance application informs the applicant that the agent
may modify the terms of the policy before issue.
D. When an insurer knows of grounds for non-coverage and then decides to manage
the defense of a lawsuit against the insured, the insurer must discontinue the
investigation.
Give this one a try later!
, Reservation of rights letters and nonwaiver agreements should generally
be in writing because oral notice may be too difficult to prove in court
B is incorrect. A reservation of rights letter is a unilateral agreement, in that
it is not signed by the insured. However, a reservation of rights letter can be
as effective as a nonwaiver agreement (which is signed by the insured),
provided the letter has been drafted carefully, and the insurer can prove
that the insured received the letter.
C is incorrect. The nonwaiver clause in an insurance application informs the
applicant that the agent may not modify the terms of the policy.
D is incorrect. When an insurer knows of grounds for non-coverage and
then decides to manage the defense of a lawsuit against the insured, the
insurer cannot refuse coverage on those grounds unless the insurer
provided timely notice of its reservation of rights.
Christina loaned Mikaela $1,000. In return, Mikaela gives Christina title to her car as
collateral. This is an example of a:
A. Conditional sale.
B. Debtor lien.
C. Chattel mortgage.
D. Pledge.
Give this one a try later!
Chattel mortgage.
Which one of the following best describes a conditional sale?
A. A seller receives cash equal to the fair market value of the property being sold.
B. A debtor delivers goods for a creditor to hold as security until payment has been
made
C. A creditor lends money to a debtor, who uses the money to purchase an item
, D. A debtor retains possession of property while a creditor retains the right to take
ownership of the property.
Give this one a try later!
A creditor lends money to a debtor, who uses the money to purchase an
item.
A is incorrect. This is an example of an actual sale.
B is incorrect. This is an example of a pledge.
D is incorrect. This is an example of a chattel mortgage.
The justification for imposing strict liability on those who carry on ultrahazardous
activities is that they have, for their own purposes:
A. Committed a breach of warranty.
B. Created an unusual risk in the community.
C. Created a fatal situation for invitees.
D. Lowered surrounding property values.
Give this one a try later!
Created an unusual risk in the community.
Which one of the following cannot be discharged in bankruptcy?
A. Credit card debt.
B. Unsecured claims of governmental units.
C. Debts incurred in court actions arising from drunk driving.
D. Unsecured business debts.
Give this one a try later!
