ARM 402 ALL UPDATED QUESTIONS AND
ANSWERS SET A+
✔✔A2Z Contracting entered into a contract with a large corporation headquartered in a
different state. A2Z's counsel recommended that they negotiate to have a clause
included into a contract that specifies their state's law will govern the contract's
interpretation. This is an example of
A. Limiting liability.
B. A loss prevention measure for contractual liability.
C. Diversification.
D. A loss reduction measure for contractual liability. - ✔✔D
✔✔For a contract to be enforceable, each party must give up something of value. This
is known as
A. Legal purpose.
B. Agreement.
C. Capacity.
D. Consideration. - ✔✔D
✔✔Which one of the following can limit liability if they are posted so that they are
physically apparent, expressed in clear terms, in language the other party understands,
and reasonable in extent?
A. Unilateral notices
B. Hold-harmless agreements
C. Waivers
D. Exculpatory agreements - ✔✔A
✔✔A defendant's violation of a statute can
A. Be categorized as irrelevant in a civil matter.
B. Constitute a breach of duty of care.
C. Be relevant only in a criminal context.
D. Translate into automatic damages being awarded to a plaintiff. - ✔✔B
, ✔✔In a majority of countries, the legal systems fall into the two major categories of
A. Common-law system and tort-law system.
B. Common-law system and civil-law system.
C. Common-law system and criminal-law system.
D. Civil-law system and criminal-law system. - ✔✔B
✔✔An implied contract is a contract that
A. Is not a legally enforceable contract because it lacks one or more of the necessary
requirements.
B. Meets all of the requirements to be enforceable.
C. Can be rescinded at the election of one or both of the parties to it.
D. Has terms and intentions indicated by the actions of the parties to the contract and
the surrounding circumstances. - ✔✔D
✔✔If a business dispute arises between companies who are domiciled in two different
countries with dissimilar laws, one issue that must be considered is whether
A. The chosen court has the right to hear the legal dispute.
B. The dispute is subject to public or private international law.
C. Both countries are General Agreement of Tariffs and Trade member countries.
D. Either country has a priority trade agreement established. - ✔✔A
✔✔Which one of the following is a contractual provision by which one party agrees to
assume the liability of a second party?
A. Exculpatory agreements
B. Waiver notices
C. Unilateral notices
D. Hold harmless agreement - ✔✔D
✔✔The risk manager for Rapids Rover, a white water rafting company, is working with
an attorney to draft a new rental agreement. To enable Rapids Rover to avoid liability
for negligence or unsafe acts, they decide to make everyone sign
A. A waiver.
B. A release of liability.
C. A unilateral notice.
D. A warrantee. - ✔✔B
✔✔A voluntary relinquishment of a known right defines
A. An exculpatory agreement.
B. A hold-harmless agreement.
C. A waiver.
D. Avoidance. - ✔✔C
ANSWERS SET A+
✔✔A2Z Contracting entered into a contract with a large corporation headquartered in a
different state. A2Z's counsel recommended that they negotiate to have a clause
included into a contract that specifies their state's law will govern the contract's
interpretation. This is an example of
A. Limiting liability.
B. A loss prevention measure for contractual liability.
C. Diversification.
D. A loss reduction measure for contractual liability. - ✔✔D
✔✔For a contract to be enforceable, each party must give up something of value. This
is known as
A. Legal purpose.
B. Agreement.
C. Capacity.
D. Consideration. - ✔✔D
✔✔Which one of the following can limit liability if they are posted so that they are
physically apparent, expressed in clear terms, in language the other party understands,
and reasonable in extent?
A. Unilateral notices
B. Hold-harmless agreements
C. Waivers
D. Exculpatory agreements - ✔✔A
✔✔A defendant's violation of a statute can
A. Be categorized as irrelevant in a civil matter.
B. Constitute a breach of duty of care.
C. Be relevant only in a criminal context.
D. Translate into automatic damages being awarded to a plaintiff. - ✔✔B
, ✔✔In a majority of countries, the legal systems fall into the two major categories of
A. Common-law system and tort-law system.
B. Common-law system and civil-law system.
C. Common-law system and criminal-law system.
D. Civil-law system and criminal-law system. - ✔✔B
✔✔An implied contract is a contract that
A. Is not a legally enforceable contract because it lacks one or more of the necessary
requirements.
B. Meets all of the requirements to be enforceable.
C. Can be rescinded at the election of one or both of the parties to it.
D. Has terms and intentions indicated by the actions of the parties to the contract and
the surrounding circumstances. - ✔✔D
✔✔If a business dispute arises between companies who are domiciled in two different
countries with dissimilar laws, one issue that must be considered is whether
A. The chosen court has the right to hear the legal dispute.
B. The dispute is subject to public or private international law.
C. Both countries are General Agreement of Tariffs and Trade member countries.
D. Either country has a priority trade agreement established. - ✔✔A
✔✔Which one of the following is a contractual provision by which one party agrees to
assume the liability of a second party?
A. Exculpatory agreements
B. Waiver notices
C. Unilateral notices
D. Hold harmless agreement - ✔✔D
✔✔The risk manager for Rapids Rover, a white water rafting company, is working with
an attorney to draft a new rental agreement. To enable Rapids Rover to avoid liability
for negligence or unsafe acts, they decide to make everyone sign
A. A waiver.
B. A release of liability.
C. A unilateral notice.
D. A warrantee. - ✔✔B
✔✔A voluntary relinquishment of a known right defines
A. An exculpatory agreement.
B. A hold-harmless agreement.
C. A waiver.
D. Avoidance. - ✔✔C
