AIC 301 Question and Answer [2026] |
UPDATED ACTUAL Exam | Detailed
Solutions
• One purpose served by a bill of lading is to serve as
Select one:
A. An endorsement to a document of title.
B. A description of goods in a warehouse.
C. The receipt of goods by the carrier for delivery.
D. A contract for the storage of goods. -✓✓ C. The receipt of goods by the carrier
for delivery.
• Jack and JoAnn who are spouses, live in a western state of the United States and
when they divorced they equally shared all property acquired while they were
married. There was also property owned individually at the time they were married
as well as property inherited by JoAnn. Their state is using laws relating to
Select one:
A. Jointly titled property.
B. Separate property.
C. Community property.
D. Property in its entirety. -✓✓ C. Community property.
• Which one of the following rights is assignable under the general rule of contract
law?
Select one:
A. The right to receive veteran disability benefits
B. The right to sue for damage for property loss or damage
,C. The right to assign personal duties
D. The right to receive workers compensation benefits -✓✓ B. The right to sue for
damage for property loss or damage
• Alva had an auto insurance policy written by Guilford Insurance Co. Alva had an
auto accident with Furkan. Furkan was injured in the accident and he filed suit
against Guilford for his damages. Guilford filed a motion to dismiss the lawsuit,
claiming that Furkan had no right to sue Guilford. Which one of the following
correctly states how the court will rule on Guilford's motion?
Select one:
A. The motion will be denied, if Alva asks Guilford to permit Furkan to sue
Guilford.
B. The motion will be denied because liability insurers generally owe a duty to
third-party claimants.
C. The motion will be denied, if a direct-action statute has been enacted.
D. The motion will be denied because third parties may sue insurers of negligent
parties. -✓✓ C. The motion will be denied, if a direct-action statute has been
enacted.
• Mikael, a new insurance agent, sent a letter to all residents of his apartment
complex that set out the basic terms of a renter's policy and stated: "I will issue this
policy to you and expect your $300 annual premium if I don't hear from you to the
contrary within 30 days." Linnea, a neighbor, received this letter but did not
respond. Which one of the following statements about Linnea's legal obligation
under contract law is true?
Select one:
A. Linnea has no legal obligation to pay Mikael $300 because silence can never
constitute acceptance.
B. Linnea is legally obligated to pay Mikael $300.
,C. Linnea is legally obligated to pay Mikael $300 unless she objects within 30
days.
D. Linnea has no legal obligation to pay Mikael $300 because no prior course of
dealing supports this. -✓✓ D. Linnea has no legal obligation to pay Mikael $300
because no prior course of dealing supports this.
• Jill's mother, Amy, contracted with Pete to sell him some lawn equipment for
$600. Jill needed $200 for college textbooks so Amy asked Pete to give Jill $200
of the $600 he owed to her. Amy received $400 and Jill received $200. In this
situation Jill is the
Select one:
A. Third-party beneficiary.
B. Unintended donee.
C. Promisee.
D. Promisor. -✓✓ A. Third-party beneficiary.
• An insurance contract is often said to be a contract of adhesion. Which one of the
following is the basis of this characteristic of insurance contracts?
Select one:
A. The insurer writes the insurance policy so the insured must "take or leave" the
policy.
B. The parties to the insurance contract must perform certain conditions.
C. Insurance contracts should not pay more than losses incurred.
D. Parties to insurance contracts must be honest with each other. -✓✓ A. The
insurer writes the insurance policy so the insured must "take or leave" the policy.
• Luke and Elia are in a dispute over the meaning of a term in a service contract
between them. Luke argues that 12 p.m. means 12 noon, and Elia says no, it means
12 midnight. Luke believes he is right because he was the drafter of the contract.
, They both found research indicating that it could go either way, depending on
which convention is used. Which one of the following is the doctrine that a court
would use to resolve this dispute?
Select one:
A. Contra proferentum
B. Divisible contract
C. Contradictory terms
D. Intention of parties -✓✓ A. Contra proferentum (Contra proferentum, meaning
"against the offeror." Ambiguous language is interpreted against the interests of its
creator. This encourages parties to be as clear as possible when drafting contracts.)
• Fair trade laws at both the federal and state levels protect the consumer by
Select one:
A. Regulating the ability of creditors to seize the assets of debtors.
B. Limiting restraints on trade to ensure a competitive marketplace.
C. Requiring full disclosure of information and fair treatment by credit providers.
D. Mandating various health and safety guidelines for all products and services
sold in the U.S. -✓✓ B. Limiting restraints on trade to ensure a competitive
marketplace.
• Patrick notified his insurer that his insured artwork was stolen. Before beginning
an investigation, his insurer sent a claim representative to offer a nonwaiver
agreement that cites potential coverage issues. Patrick refused to sign the
agreement. The representative then sent Patrick a reservation of rights letter via
certified mail, and after Patrick had received the letter, Patrick's insurer began its
investigation. Patrick's insurer is protected
Select one:
A. Against prior or subsequent claims of waiver, estoppel, or election, but only
those relating to the same policy or loss.
UPDATED ACTUAL Exam | Detailed
Solutions
• One purpose served by a bill of lading is to serve as
Select one:
A. An endorsement to a document of title.
B. A description of goods in a warehouse.
C. The receipt of goods by the carrier for delivery.
D. A contract for the storage of goods. -✓✓ C. The receipt of goods by the carrier
for delivery.
• Jack and JoAnn who are spouses, live in a western state of the United States and
when they divorced they equally shared all property acquired while they were
married. There was also property owned individually at the time they were married
as well as property inherited by JoAnn. Their state is using laws relating to
Select one:
A. Jointly titled property.
B. Separate property.
C. Community property.
D. Property in its entirety. -✓✓ C. Community property.
• Which one of the following rights is assignable under the general rule of contract
law?
Select one:
A. The right to receive veteran disability benefits
B. The right to sue for damage for property loss or damage
,C. The right to assign personal duties
D. The right to receive workers compensation benefits -✓✓ B. The right to sue for
damage for property loss or damage
• Alva had an auto insurance policy written by Guilford Insurance Co. Alva had an
auto accident with Furkan. Furkan was injured in the accident and he filed suit
against Guilford for his damages. Guilford filed a motion to dismiss the lawsuit,
claiming that Furkan had no right to sue Guilford. Which one of the following
correctly states how the court will rule on Guilford's motion?
Select one:
A. The motion will be denied, if Alva asks Guilford to permit Furkan to sue
Guilford.
B. The motion will be denied because liability insurers generally owe a duty to
third-party claimants.
C. The motion will be denied, if a direct-action statute has been enacted.
D. The motion will be denied because third parties may sue insurers of negligent
parties. -✓✓ C. The motion will be denied, if a direct-action statute has been
enacted.
• Mikael, a new insurance agent, sent a letter to all residents of his apartment
complex that set out the basic terms of a renter's policy and stated: "I will issue this
policy to you and expect your $300 annual premium if I don't hear from you to the
contrary within 30 days." Linnea, a neighbor, received this letter but did not
respond. Which one of the following statements about Linnea's legal obligation
under contract law is true?
Select one:
A. Linnea has no legal obligation to pay Mikael $300 because silence can never
constitute acceptance.
B. Linnea is legally obligated to pay Mikael $300.
,C. Linnea is legally obligated to pay Mikael $300 unless she objects within 30
days.
D. Linnea has no legal obligation to pay Mikael $300 because no prior course of
dealing supports this. -✓✓ D. Linnea has no legal obligation to pay Mikael $300
because no prior course of dealing supports this.
• Jill's mother, Amy, contracted with Pete to sell him some lawn equipment for
$600. Jill needed $200 for college textbooks so Amy asked Pete to give Jill $200
of the $600 he owed to her. Amy received $400 and Jill received $200. In this
situation Jill is the
Select one:
A. Third-party beneficiary.
B. Unintended donee.
C. Promisee.
D. Promisor. -✓✓ A. Third-party beneficiary.
• An insurance contract is often said to be a contract of adhesion. Which one of the
following is the basis of this characteristic of insurance contracts?
Select one:
A. The insurer writes the insurance policy so the insured must "take or leave" the
policy.
B. The parties to the insurance contract must perform certain conditions.
C. Insurance contracts should not pay more than losses incurred.
D. Parties to insurance contracts must be honest with each other. -✓✓ A. The
insurer writes the insurance policy so the insured must "take or leave" the policy.
• Luke and Elia are in a dispute over the meaning of a term in a service contract
between them. Luke argues that 12 p.m. means 12 noon, and Elia says no, it means
12 midnight. Luke believes he is right because he was the drafter of the contract.
, They both found research indicating that it could go either way, depending on
which convention is used. Which one of the following is the doctrine that a court
would use to resolve this dispute?
Select one:
A. Contra proferentum
B. Divisible contract
C. Contradictory terms
D. Intention of parties -✓✓ A. Contra proferentum (Contra proferentum, meaning
"against the offeror." Ambiguous language is interpreted against the interests of its
creator. This encourages parties to be as clear as possible when drafting contracts.)
• Fair trade laws at both the federal and state levels protect the consumer by
Select one:
A. Regulating the ability of creditors to seize the assets of debtors.
B. Limiting restraints on trade to ensure a competitive marketplace.
C. Requiring full disclosure of information and fair treatment by credit providers.
D. Mandating various health and safety guidelines for all products and services
sold in the U.S. -✓✓ B. Limiting restraints on trade to ensure a competitive
marketplace.
• Patrick notified his insurer that his insured artwork was stolen. Before beginning
an investigation, his insurer sent a claim representative to offer a nonwaiver
agreement that cites potential coverage issues. Patrick refused to sign the
agreement. The representative then sent Patrick a reservation of rights letter via
certified mail, and after Patrick had received the letter, Patrick's insurer began its
investigation. Patrick's insurer is protected
Select one:
A. Against prior or subsequent claims of waiver, estoppel, or election, but only
those relating to the same policy or loss.
