©EVERLY 2025 ALL RIGHTS RESERVED
CPCU 530 Exam Questions And Answers
Latest Updated 2025 |100% Verified.
Procedural Law - Answer✔-Defines the process of enforcing laws
-Ex: whether a party should sue in state or federal court
Substantive Law - Answer✔-Defines the rights & duties of a party
-Ex: defining the laws which determine if an act is illegal
What are the 2 types of law applied in the United States? - Answer✔-Civil Law (breach of a
party's rights)
-Criminal Law (criminal acts)
Who are the 2 parties to a contract? - Answer✔-Promisor (makes the promise)
-Promisee (party to which the promise is made
What are the 4 characteristics of contracts? - Answer✔-Execution (Executed / Executory)
-Formation (Express / Implied)
-Promise (Bilateral / Unilateral)
-Voidability (Void / Voidable)
1
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Implied Contract - Answer✔-Terms are defined by the actions of the involved parties
-Implied-In-Fact: formed based on presumptions from prior dealings between the parties
-Implied-In-Law: terms are considered an obligation based on the involved parties' conduct, ex:
vet saves choking dog at park, dog owner must pay vet
Bilateral Promise - Answer✔-Each party promises a contractual performance
-Ex: Joe promises to paint Bob's house, in return, Bob promises to mow Joe's lawn
Unilateral Promise - Answer✔-Only one party promises a contractual performance
-Ex: Joe promises to paint Bob's house
What are the 6 components of an enforceable contract? - Answer✔-Agreement
-Consideration
-Capacity
-Lawful
-Mutual Assent
-Correct Form
What are the 2 conditions of agreement? - Answer✔-Offer
-Acceptance
What are the 3 requirements of a valid offer? - Answer✔-Communication: offeree must be
aware of the offer
-Commitment: "intent to contract"
-Definite Terms: includes required details
What are the 4 requirements of a acceptance? - Answer✔-Accepted by the offerree (nobody
else)
2
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-Acceptance is explicit (unequivocal, clear, not vague)
-Acceptance is unconditional (no changes/counteroffers)
-Acceptance is communicated to the offeror
Communication (Valid Acceptance Requirement) - Answer✔-Offerrees may not revoke an
acceptance once it has been communicated to the offeror
-The acceptance is binding as soon as it leaves the offerree's possession
-For offers accepted by mail, the acceptance is effective once it is mailed
-Communication is NOT required in a unilateral contract
Acceptance (Bilateral Contract) - Answer✔-Acceptance is complete when the offerree gives the
offeror the return promise
-Ex: Amy offers to sell Joe a bike for $200, Joe says "I will pay you $200 by noon tomorrow"
Acceptance (Unilateral Contract) - Answer✔-Acceptance is complete when the offerree
performs their promise
-Communication is not required
-Ex: "I will pay John $20 to mow my law on Sept. 1", if John mows the lawn on Sept. 1, it is a
binding acceptance
What does not constitute a binding acceptance? - Answer✔-Complaints
-Nonresponse
What are the 2 requirements of consideration? - Answer✔-Binding Promise
-ex: Manufacturer agrees to purchase raw materials from ONE supplier
-Exchange (the promise must contain a present or future commitment for an exchange of value
What are the 4 parties without the capacity to contract? - Answer✔-Insane persons
3
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-Intoxicated persons
-Restricted corporations (law/corporate charter)
-Minors
Usury - Answer✔-When a financial institution, such as a bank, charges an illegally high interest
rate
-The contract is not enforceable
Mutual Assent - Answer✔-The involved parties mutually & voluntarily agree to the contract
terms
-"Meeting of the Minds"
What is the Uniform Commercial Code (UCC)? - Answer✔-Governs the legal basis for business
transactions
UCC Article 2 - Answer✔-Governs the law of the sale of goods
-Defines as good as anything tangible, other than money, that can be moved
What are the 2 requirements of sales contracts? - Answer✔-Agreement (offer & acceptance)
-Consideration (exchanging the goods for $)
Inspection - Answer✔-The buyer's right to examine goods before accepting
-The buyer may reject nonconforming goods
-NOT permitted in Collect on Delivery (CoD) deals
Terms of Delivery - Answer✔-Cost and Freight (CAF)
-Cost Insurance Freight (CIF)
-Collect on Delivery (COD)
4
CPCU 530 Exam Questions And Answers
Latest Updated 2025 |100% Verified.
Procedural Law - Answer✔-Defines the process of enforcing laws
-Ex: whether a party should sue in state or federal court
Substantive Law - Answer✔-Defines the rights & duties of a party
-Ex: defining the laws which determine if an act is illegal
What are the 2 types of law applied in the United States? - Answer✔-Civil Law (breach of a
party's rights)
-Criminal Law (criminal acts)
Who are the 2 parties to a contract? - Answer✔-Promisor (makes the promise)
-Promisee (party to which the promise is made
What are the 4 characteristics of contracts? - Answer✔-Execution (Executed / Executory)
-Formation (Express / Implied)
-Promise (Bilateral / Unilateral)
-Voidability (Void / Voidable)
1
, ©EVERLY 2025 ALL RIGHTS RESERVED
Implied Contract - Answer✔-Terms are defined by the actions of the involved parties
-Implied-In-Fact: formed based on presumptions from prior dealings between the parties
-Implied-In-Law: terms are considered an obligation based on the involved parties' conduct, ex:
vet saves choking dog at park, dog owner must pay vet
Bilateral Promise - Answer✔-Each party promises a contractual performance
-Ex: Joe promises to paint Bob's house, in return, Bob promises to mow Joe's lawn
Unilateral Promise - Answer✔-Only one party promises a contractual performance
-Ex: Joe promises to paint Bob's house
What are the 6 components of an enforceable contract? - Answer✔-Agreement
-Consideration
-Capacity
-Lawful
-Mutual Assent
-Correct Form
What are the 2 conditions of agreement? - Answer✔-Offer
-Acceptance
What are the 3 requirements of a valid offer? - Answer✔-Communication: offeree must be
aware of the offer
-Commitment: "intent to contract"
-Definite Terms: includes required details
What are the 4 requirements of a acceptance? - Answer✔-Accepted by the offerree (nobody
else)
2
, ©EVERLY 2025 ALL RIGHTS RESERVED
-Acceptance is explicit (unequivocal, clear, not vague)
-Acceptance is unconditional (no changes/counteroffers)
-Acceptance is communicated to the offeror
Communication (Valid Acceptance Requirement) - Answer✔-Offerrees may not revoke an
acceptance once it has been communicated to the offeror
-The acceptance is binding as soon as it leaves the offerree's possession
-For offers accepted by mail, the acceptance is effective once it is mailed
-Communication is NOT required in a unilateral contract
Acceptance (Bilateral Contract) - Answer✔-Acceptance is complete when the offerree gives the
offeror the return promise
-Ex: Amy offers to sell Joe a bike for $200, Joe says "I will pay you $200 by noon tomorrow"
Acceptance (Unilateral Contract) - Answer✔-Acceptance is complete when the offerree
performs their promise
-Communication is not required
-Ex: "I will pay John $20 to mow my law on Sept. 1", if John mows the lawn on Sept. 1, it is a
binding acceptance
What does not constitute a binding acceptance? - Answer✔-Complaints
-Nonresponse
What are the 2 requirements of consideration? - Answer✔-Binding Promise
-ex: Manufacturer agrees to purchase raw materials from ONE supplier
-Exchange (the promise must contain a present or future commitment for an exchange of value
What are the 4 parties without the capacity to contract? - Answer✔-Insane persons
3
, ©EVERLY 2025 ALL RIGHTS RESERVED
-Intoxicated persons
-Restricted corporations (law/corporate charter)
-Minors
Usury - Answer✔-When a financial institution, such as a bank, charges an illegally high interest
rate
-The contract is not enforceable
Mutual Assent - Answer✔-The involved parties mutually & voluntarily agree to the contract
terms
-"Meeting of the Minds"
What is the Uniform Commercial Code (UCC)? - Answer✔-Governs the legal basis for business
transactions
UCC Article 2 - Answer✔-Governs the law of the sale of goods
-Defines as good as anything tangible, other than money, that can be moved
What are the 2 requirements of sales contracts? - Answer✔-Agreement (offer & acceptance)
-Consideration (exchanging the goods for $)
Inspection - Answer✔-The buyer's right to examine goods before accepting
-The buyer may reject nonconforming goods
-NOT permitted in Collect on Delivery (CoD) deals
Terms of Delivery - Answer✔-Cost and Freight (CAF)
-Cost Insurance Freight (CIF)
-Collect on Delivery (COD)
4
