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CPCU 530 Exam Questions And Answers
Latest Updated 2025 |100% Verified.
Which one of the following best describes equity courts in the United States federal judicial
system? - Answer✔Modern equity courts in the U.S. federal system are unified with courts of
law. Judges, not juries, can use the broad powers of equity to create fair solutions beyond what
traditional legal remedies can offer.
Physician Betty administered medical services to stroke victim Karl who was unconscious. She
provided medication and direction and followed all procedures. When Karl woke up, he refused
other medical services and he also indicated that he could not be held liable for any expenses
that he did not personally authorize or to which he did not consent. It is likely that Karl might be
required to pay the reasonable value of the services received based on - Answer✔This is typical
of an implied-in-law contract and not of an implied-in-fact, unilateral, or executory contract. If a
doctor renders professional services to an unconscious person then the law might obligate the
patient to pay for those services based on an implied-in-law contract, to avoid unjust
enrichment.
A bilateral contract is - Answer✔A bilateral contract is a contract in which each party promises a
performance. In contrast, a unilateral contract is one where only one party makes a promise or
undertakes the requested performance.
Five-year-old Janet lost her dog and Janet's parents offered a $50 reward to anyone who
returned the dog to Janet. With no knowledge of the reward offer, 12-year-old Judy found the
dog in an alley, saw the name tag, and returned the dog to Janet. When Judy told her parents
about the return of Janet's dog, they attempted to collect the reward for Judy. The reason their
attempt to collect the reward might fail is because there - Answer✔The reason Judy's parents'
1
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attempt to collect the reward on Judy's behalf might fail is because there was no
communication of the reward offer since Judy was not aware of the reward when she returned
the dog. There was no communication of an offer to the offeree.
Which one of the following statements is true regarding entering into a contract with certain
incompetent persons? - Answer✔Contracts that benefit the insane may be valid. If an
agreement benefits an insane person and the other party is unaware of the infirmity, the insane
person cannot avoid the contract.
A contract has been formed for the construction of a shopping mall. The company representing
the shopping mall has made a payment of $10,000. What type of consideration is this payment?
- Answer✔Valuable
Daniel and Chloe entered into a written contract for the sale of a black stallion for $5,000. They
also had an oral agreement that Chloe would test her horse for eye disease, and if a
professional determined that the horse's eyesight was good, Daniel would honor the contract.
Chloe decided to save some money by examining the horse herself, rather than hiring a
veterinarian. After a good-faith examination, she determined that the horse's eyes were
healthy. If Daniel refused to buy the horse, which one of the following exceptions to the parol
evidence rule would be most helpful to him? - Answer✔The exception to the parol evidence
rule would be condition precedent, because no professional had determined that the horse's
eyesight was good, a condition that had to be met for a contract to form.
In a contract for 1,000 loaves of bread, grocer Andy wrote out the words "one thousand" but
typed in the number 100. The supplier delivered 100 loaves which resulted in a loss of a major
customer. Which one of the following priorities will apply in this case? - Answer✔When the
parties have made typewritten or handwritten changes in a printed contract form, the courts
apply the rule that handwriting prevails over typewriting as the first priority.This is a
typographical error and therefore handwriting will prevail over typewriting.
Gilda hired artist Lance to restore an expensive painting for $1,000. After working on the
painting, Lance decided the job was too labor intensive and demanded $3,000. Gilda sued
Lance for breach of contract. A court is most likely to - Answer✔Require specific performance.
Specific performance is a court-ordered equitable remedy requiring precise fulfillment of a
contractual obligation when money damages are inappropriate or inadequate. Damages, a
2
, ©EVERLY 2025 ALL RIGHTS RESERVED
contract novation or an injunction will not help Gilda remedy the breach or achieve her initial
goals. However, specific performance would require Lance to finish the job.
The premium for any particular insurance policy should reflect - Answer✔The insured's share of
estimated losses that the insurer must pay.
Mustafa met with his insurance agent Lucy to obtain a businessowners policy. Lucy helped
Mustafa complete an application and sent the signed application along with Mustafa's premium
check to Delmond Insurance Co. Delmond never responded to Mustafa. Ninety days later,
Mustafa had a loss to his business that would have been covered by the Delmond policy. If
Mustafa files suit against Delmond to receive compensation for his loss, - Answer✔Mustafa will
win, if Delmond's s delay on his application was unreasonable.
An insurance company determines that inaccurate information has been provided by an
insurance applicant. Which one of the following statements is true concerning whether the
contract is voidable? - Answer✔If the information was false and related to a material fact and
relied upon by the insurer, the contract is voidable.
Which one of the following answers best explains whether reservation of rights letters can be
as effective as signed nonwaiver agreements in protecting the insurer's rights to policy
defenses? - Answer✔A reservation of rights letter can be as effective if the insurer has drafted
the letter carefully and can show that the insured received it.
Checks are the most familiar negotiable instruments. Which one of the following best describes
the check transaction for altered checks? - Answer✔A bank can charge an altered check to the
depositor's account only to the extent of the check's original terms.
Which one of the following is a necessary element for a document to be considered a title
under Uniform Commercial Code (UCC) Article 7? - Answer✔The document is created by the
bailee as a receipt for goods received.
3
, ©EVERLY 2025 ALL RIGHTS RESERVED
Jason wants to purchase a $5,000 plasma TV from Toby and agrees to pay for it in 12 monthly
installments. In order for Toby to perfect his security interest in the TV, - Answer✔He can file a
copy of the purchase agreement in a public records office.
Maxco sent unsolicited credit cards to 500 people who had credit scores of 800 or better.
Which one of the following laws does this violate? - Answer✔Truth in Lending Act
June's employer has a gift program in December of each year that allows employees to select
one gift from a catalog of items. These employees are taxed according to the retail value of the
item selected and may opt to take cash or even reject the gift option. In this situation the most
significant element of the employee's gift is - Answer✔June's acceptance of the gift.
Bailors and bailees have rights and duties related to property in bailment. The principal
consideration in determining these rights and duties is - Answer✔The identification of the
intended beneficiary of the bailment.
Under the form of cooperative ownership, Company X owns an apartment complex with 50
single family dwelling units. Some apartments have been remodeled and apartments vary in
size and accommodations. Which one of the following statements is true? -
Answer✔Corporation X holds title to the apartment complex property.
A land contract is a type of interest in real property. Which one of the following statements
about a land contract is true? - Answer✔The seller retains title under a land contract.
Tenant Dixie complained to her landlord that she was too cold in her leased apartment. The
landlord refused to upgrade the furnace. Dixie had baseboard heaters installed and hard-wired
into the apartment. These heaters are - Answer✔Fixtures.
Tenant Adam defaulted on his rent payments to landlord Leon. Adam left town and abandoned
his personal property. Leon can treat Adam's abandoned property as an anticipatory breach -
Answer✔And receive as damages the amount of the remaining rent payments.
4
CPCU 530 Exam Questions And Answers
Latest Updated 2025 |100% Verified.
Which one of the following best describes equity courts in the United States federal judicial
system? - Answer✔Modern equity courts in the U.S. federal system are unified with courts of
law. Judges, not juries, can use the broad powers of equity to create fair solutions beyond what
traditional legal remedies can offer.
Physician Betty administered medical services to stroke victim Karl who was unconscious. She
provided medication and direction and followed all procedures. When Karl woke up, he refused
other medical services and he also indicated that he could not be held liable for any expenses
that he did not personally authorize or to which he did not consent. It is likely that Karl might be
required to pay the reasonable value of the services received based on - Answer✔This is typical
of an implied-in-law contract and not of an implied-in-fact, unilateral, or executory contract. If a
doctor renders professional services to an unconscious person then the law might obligate the
patient to pay for those services based on an implied-in-law contract, to avoid unjust
enrichment.
A bilateral contract is - Answer✔A bilateral contract is a contract in which each party promises a
performance. In contrast, a unilateral contract is one where only one party makes a promise or
undertakes the requested performance.
Five-year-old Janet lost her dog and Janet's parents offered a $50 reward to anyone who
returned the dog to Janet. With no knowledge of the reward offer, 12-year-old Judy found the
dog in an alley, saw the name tag, and returned the dog to Janet. When Judy told her parents
about the return of Janet's dog, they attempted to collect the reward for Judy. The reason their
attempt to collect the reward might fail is because there - Answer✔The reason Judy's parents'
1
, ©EVERLY 2025 ALL RIGHTS RESERVED
attempt to collect the reward on Judy's behalf might fail is because there was no
communication of the reward offer since Judy was not aware of the reward when she returned
the dog. There was no communication of an offer to the offeree.
Which one of the following statements is true regarding entering into a contract with certain
incompetent persons? - Answer✔Contracts that benefit the insane may be valid. If an
agreement benefits an insane person and the other party is unaware of the infirmity, the insane
person cannot avoid the contract.
A contract has been formed for the construction of a shopping mall. The company representing
the shopping mall has made a payment of $10,000. What type of consideration is this payment?
- Answer✔Valuable
Daniel and Chloe entered into a written contract for the sale of a black stallion for $5,000. They
also had an oral agreement that Chloe would test her horse for eye disease, and if a
professional determined that the horse's eyesight was good, Daniel would honor the contract.
Chloe decided to save some money by examining the horse herself, rather than hiring a
veterinarian. After a good-faith examination, she determined that the horse's eyes were
healthy. If Daniel refused to buy the horse, which one of the following exceptions to the parol
evidence rule would be most helpful to him? - Answer✔The exception to the parol evidence
rule would be condition precedent, because no professional had determined that the horse's
eyesight was good, a condition that had to be met for a contract to form.
In a contract for 1,000 loaves of bread, grocer Andy wrote out the words "one thousand" but
typed in the number 100. The supplier delivered 100 loaves which resulted in a loss of a major
customer. Which one of the following priorities will apply in this case? - Answer✔When the
parties have made typewritten or handwritten changes in a printed contract form, the courts
apply the rule that handwriting prevails over typewriting as the first priority.This is a
typographical error and therefore handwriting will prevail over typewriting.
Gilda hired artist Lance to restore an expensive painting for $1,000. After working on the
painting, Lance decided the job was too labor intensive and demanded $3,000. Gilda sued
Lance for breach of contract. A court is most likely to - Answer✔Require specific performance.
Specific performance is a court-ordered equitable remedy requiring precise fulfillment of a
contractual obligation when money damages are inappropriate or inadequate. Damages, a
2
, ©EVERLY 2025 ALL RIGHTS RESERVED
contract novation or an injunction will not help Gilda remedy the breach or achieve her initial
goals. However, specific performance would require Lance to finish the job.
The premium for any particular insurance policy should reflect - Answer✔The insured's share of
estimated losses that the insurer must pay.
Mustafa met with his insurance agent Lucy to obtain a businessowners policy. Lucy helped
Mustafa complete an application and sent the signed application along with Mustafa's premium
check to Delmond Insurance Co. Delmond never responded to Mustafa. Ninety days later,
Mustafa had a loss to his business that would have been covered by the Delmond policy. If
Mustafa files suit against Delmond to receive compensation for his loss, - Answer✔Mustafa will
win, if Delmond's s delay on his application was unreasonable.
An insurance company determines that inaccurate information has been provided by an
insurance applicant. Which one of the following statements is true concerning whether the
contract is voidable? - Answer✔If the information was false and related to a material fact and
relied upon by the insurer, the contract is voidable.
Which one of the following answers best explains whether reservation of rights letters can be
as effective as signed nonwaiver agreements in protecting the insurer's rights to policy
defenses? - Answer✔A reservation of rights letter can be as effective if the insurer has drafted
the letter carefully and can show that the insured received it.
Checks are the most familiar negotiable instruments. Which one of the following best describes
the check transaction for altered checks? - Answer✔A bank can charge an altered check to the
depositor's account only to the extent of the check's original terms.
Which one of the following is a necessary element for a document to be considered a title
under Uniform Commercial Code (UCC) Article 7? - Answer✔The document is created by the
bailee as a receipt for goods received.
3
, ©EVERLY 2025 ALL RIGHTS RESERVED
Jason wants to purchase a $5,000 plasma TV from Toby and agrees to pay for it in 12 monthly
installments. In order for Toby to perfect his security interest in the TV, - Answer✔He can file a
copy of the purchase agreement in a public records office.
Maxco sent unsolicited credit cards to 500 people who had credit scores of 800 or better.
Which one of the following laws does this violate? - Answer✔Truth in Lending Act
June's employer has a gift program in December of each year that allows employees to select
one gift from a catalog of items. These employees are taxed according to the retail value of the
item selected and may opt to take cash or even reject the gift option. In this situation the most
significant element of the employee's gift is - Answer✔June's acceptance of the gift.
Bailors and bailees have rights and duties related to property in bailment. The principal
consideration in determining these rights and duties is - Answer✔The identification of the
intended beneficiary of the bailment.
Under the form of cooperative ownership, Company X owns an apartment complex with 50
single family dwelling units. Some apartments have been remodeled and apartments vary in
size and accommodations. Which one of the following statements is true? -
Answer✔Corporation X holds title to the apartment complex property.
A land contract is a type of interest in real property. Which one of the following statements
about a land contract is true? - Answer✔The seller retains title under a land contract.
Tenant Dixie complained to her landlord that she was too cold in her leased apartment. The
landlord refused to upgrade the furnace. Dixie had baseboard heaters installed and hard-wired
into the apartment. These heaters are - Answer✔Fixtures.
Tenant Adam defaulted on his rent payments to landlord Leon. Adam left town and abandoned
his personal property. Leon can treat Adam's abandoned property as an anticipatory breach -
Answer✔And receive as damages the amount of the remaining rent payments.
4
