©EVERLY 2025 ALL RIGHTS RESERVED
CPCU 530 Exam Questions And Answers
Latest Updated 2025 |100% Verified.
What elements must a legally binding contract have? - Answer✔Agreement (including offer &
acceptance); capacity (competence) of all involved parties; mutual assent; consideration; legal
purpose; proper, legally required form.
Offerror - Answer✔The party in a contract who promises to GIVE something in return for a
promise or act by another party.
Offeree - Answer✔The party to a contract who receives.
What is the first essential ingredient of a legally binding contract? - Answer✔A valid agreement
between the offeror and the offeree.
what do valid offers include? - Answer✔intent to contract, definite terms, and communication
to the offeree.
What does acceptance in a contract include? - Answer✔Acceptance by the offeree,
unconditional and unequivocal acceptance, and the offeree's communication of acceptance.
What makes an agreement valid? - Answer✔A valid offer and acceptance.
1
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What is capacity in an agreement - Answer✔Competence, or the ability for the parties involved
to understand the nature and consequences of the agreement.
Why can't minors and/or intoxicated people or artificial entities enter into certain types of
contracts? - Answer✔They do not have capacity to contract.
What are the 5 circumstances under which genuine assent to a contract may be considered
lacking? - Answer✔1. Fraud
2. Mistake
3. Duress
4. Undue Influence
5. Innocent Misrepresentation
What is fraud - Answer✔The intentional misrepresentation of facts that causes harm to a
person or an organization. The offended party usually has the option of rescinding the contract
or, in some circumstances, suing for damages.
How does a "mistake" affect genuine assent to a contract? - Answer✔People can make
mistakes regarding the facts of a transaction or laws affecting an agreement. While some
mistakes do not affect the parties' rights, others can make an agreement voidable or
unenforceable.
How does Duress influence genuine assent? - Answer✔A party who enters a contract under
duress may not have given genuine assent
What is undue influence? - Answer✔The improper use of power or trust to deprive a person of
free will and to substitute that person's objective with someone else's. It can remove the
possibility of genuine assent. For example, an attorney gives advice to a client that benefits the
attorney, rather than ensuring the best possible outcome for the client.
2
, ©EVERLY 2025 ALL RIGHTS RESERVED
What is innocent misrepresentation often misconstrued as? - Answer✔Fraud (because facts are
incorrectly portrayed)
What is the difference between Fraud and innocent misrepresentation? - Answer✔While Fraud
can lead to a contract being voided, monetary damages are not awarded for it.
What must the promisor receive for the element of consideration to be represented in a valid
contract? - Answer✔The promisor must receive a legal benefit, such as money, or the promisee
must suffer a legal detriment, such as inconvenience, loss, or relinquishment of something of
value.
What are a return promise, an act performed, or giving up a legal right in terms of contracts? -
Answer✔Consideration necessary to make a promise enforceable.
Consideration - Answer✔Something of value or bargained for and exchanged by the parties to a
contract.
What does proper, legally required form mean in most cases? - Answer✔In writing.
Bilateral Contract - Answer✔A contract in which each party promises a performance.
Unilateral Contract - Answer✔A contract in which only one party makes a promise or
undertakes the requested performance.
Are most contracts bilateral or unilateral? - Answer✔Bilateral
Executed Contract - Answer✔A contract that has been completely performed by both parties. It
requires nothing more of either party to be fulfilled.
3
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Executory Contract - Answer✔A contract that has not been completely performed by ONE OR
BOTH of the parties.
Is this executed or executory? One party has bought and paid for goods that another party
delivered.... - Answer✔Executed.
What type of contract is a Fire insurance policy considered? - Answer✔Executory Contract
because the insurer's promise is to perform/provide coverage, which is conditional on the
occurrence of a fire. As long as no fire occurs, the contract remains executory.
Express Contract - Answer✔A contract whose terms and intentions are explicitly stated. The
terms are clearly stated and agreed upon by both parties.
Implied Contract - Answer✔A contract whose terms and intentions are indicated by the actions
of the parties to the contract and the surrounding circumstances. Created by the nonverbal,
nonwritten conduct of the parties.
What are the two types of implied contracts? - Answer✔1. Implied-in-fact
2. Implied-in-law
What are implied-in-law contracts/Quasi Contracts? - Answer✔Obligations (NOT ACTUAL
CONTRACTS) that do NOT arise from the parties' apparent intentions but from courts' notions
of justice and equity in certain cases.
What is the main purpose of a Quasi (implied-in-law) contract? - Answer✔To prevent one party
from being unjustly enriched by the actions of another.
What re implied-in-fact contracts? - Answer✔Contracts in which unambiguous offer and
acceptance have been made, such as through an ongoing but informal arrangement.
4
CPCU 530 Exam Questions And Answers
Latest Updated 2025 |100% Verified.
What elements must a legally binding contract have? - Answer✔Agreement (including offer &
acceptance); capacity (competence) of all involved parties; mutual assent; consideration; legal
purpose; proper, legally required form.
Offerror - Answer✔The party in a contract who promises to GIVE something in return for a
promise or act by another party.
Offeree - Answer✔The party to a contract who receives.
What is the first essential ingredient of a legally binding contract? - Answer✔A valid agreement
between the offeror and the offeree.
what do valid offers include? - Answer✔intent to contract, definite terms, and communication
to the offeree.
What does acceptance in a contract include? - Answer✔Acceptance by the offeree,
unconditional and unequivocal acceptance, and the offeree's communication of acceptance.
What makes an agreement valid? - Answer✔A valid offer and acceptance.
1
, ©EVERLY 2025 ALL RIGHTS RESERVED
What is capacity in an agreement - Answer✔Competence, or the ability for the parties involved
to understand the nature and consequences of the agreement.
Why can't minors and/or intoxicated people or artificial entities enter into certain types of
contracts? - Answer✔They do not have capacity to contract.
What are the 5 circumstances under which genuine assent to a contract may be considered
lacking? - Answer✔1. Fraud
2. Mistake
3. Duress
4. Undue Influence
5. Innocent Misrepresentation
What is fraud - Answer✔The intentional misrepresentation of facts that causes harm to a
person or an organization. The offended party usually has the option of rescinding the contract
or, in some circumstances, suing for damages.
How does a "mistake" affect genuine assent to a contract? - Answer✔People can make
mistakes regarding the facts of a transaction or laws affecting an agreement. While some
mistakes do not affect the parties' rights, others can make an agreement voidable or
unenforceable.
How does Duress influence genuine assent? - Answer✔A party who enters a contract under
duress may not have given genuine assent
What is undue influence? - Answer✔The improper use of power or trust to deprive a person of
free will and to substitute that person's objective with someone else's. It can remove the
possibility of genuine assent. For example, an attorney gives advice to a client that benefits the
attorney, rather than ensuring the best possible outcome for the client.
2
, ©EVERLY 2025 ALL RIGHTS RESERVED
What is innocent misrepresentation often misconstrued as? - Answer✔Fraud (because facts are
incorrectly portrayed)
What is the difference between Fraud and innocent misrepresentation? - Answer✔While Fraud
can lead to a contract being voided, monetary damages are not awarded for it.
What must the promisor receive for the element of consideration to be represented in a valid
contract? - Answer✔The promisor must receive a legal benefit, such as money, or the promisee
must suffer a legal detriment, such as inconvenience, loss, or relinquishment of something of
value.
What are a return promise, an act performed, or giving up a legal right in terms of contracts? -
Answer✔Consideration necessary to make a promise enforceable.
Consideration - Answer✔Something of value or bargained for and exchanged by the parties to a
contract.
What does proper, legally required form mean in most cases? - Answer✔In writing.
Bilateral Contract - Answer✔A contract in which each party promises a performance.
Unilateral Contract - Answer✔A contract in which only one party makes a promise or
undertakes the requested performance.
Are most contracts bilateral or unilateral? - Answer✔Bilateral
Executed Contract - Answer✔A contract that has been completely performed by both parties. It
requires nothing more of either party to be fulfilled.
3
, ©EVERLY 2025 ALL RIGHTS RESERVED
Executory Contract - Answer✔A contract that has not been completely performed by ONE OR
BOTH of the parties.
Is this executed or executory? One party has bought and paid for goods that another party
delivered.... - Answer✔Executed.
What type of contract is a Fire insurance policy considered? - Answer✔Executory Contract
because the insurer's promise is to perform/provide coverage, which is conditional on the
occurrence of a fire. As long as no fire occurs, the contract remains executory.
Express Contract - Answer✔A contract whose terms and intentions are explicitly stated. The
terms are clearly stated and agreed upon by both parties.
Implied Contract - Answer✔A contract whose terms and intentions are indicated by the actions
of the parties to the contract and the surrounding circumstances. Created by the nonverbal,
nonwritten conduct of the parties.
What are the two types of implied contracts? - Answer✔1. Implied-in-fact
2. Implied-in-law
What are implied-in-law contracts/Quasi Contracts? - Answer✔Obligations (NOT ACTUAL
CONTRACTS) that do NOT arise from the parties' apparent intentions but from courts' notions
of justice and equity in certain cases.
What is the main purpose of a Quasi (implied-in-law) contract? - Answer✔To prevent one party
from being unjustly enriched by the actions of another.
What re implied-in-fact contracts? - Answer✔Contracts in which unambiguous offer and
acceptance have been made, such as through an ongoing but informal arrangement.
4
