CPCU 530 LATEST 2026 CORE EXAM TIPS QUESTIONS AND
ANSWERS GRADED A+
✔✔Promisor - ✔✔The party to a contract making a promise
✔✔Bilateral contract - ✔✔A contract in which each party promises a performance.
✔✔Collateral estoppel - ✔✔A doctrine that bars parties from relitigating an issue on
which a court has already ruled, even if the second lawsuit differs significantly from the
first.
✔✔Collateral source rule - ✔✔A legal doctrine that provides that the damages owed to
a victim should not be reduced because the victim is entitled to recover money from
other sources, such as an insurance policy.
✔✔Unilateral contract - ✔✔A contract in which only one party makes a promise or
undertakes the requested performance.
✔✔Assignor - ✔✔The party to a contract who makes an assignment
✔✔Bad-faith claim - ✔✔A claim that implies or involves actual or constructive fraud, a
design to mislead or deceive another, or a neglect or refusal to fulfill some good-faith
duty or some contractual good-faith obligation.
✔✔Bilateral mistake - ✔✔A perception by both parties to a contract that does not agree
with the facts
✔✔Capacity to contract - ✔✔A legal qualification that determines one's ability to enter
into an enforceable contract.
✔✔Competent party - ✔✔A party to a contract who has the basic or minimal ability to do
something and the mental ability to understand problems and make decisions.
✔✔Condition concurrent - ✔✔An event that must occur at the same time as another
condition in a contract
✔✔Condition precedent - ✔✔An event that must occur before a duty of performance
arises in a contract.
✔✔Condition subsequent - ✔✔An event that, if it occurs, discharges a duty of
performance in a contract.
✔✔Conditional contract - ✔✔A contract that one or more parties must perform only
under certain conditions.
, ✔✔Contract - ✔✔A legally enforceable agreement between two or more parties in which
each party makes some promise to the other.
✔✔Contract law - ✔✔The branch of civil law that deals with contracts and settles
contract disputes.
✔✔Contract of indemnity - ✔✔A contract in which the insurer agrees, in the event of a
covered loss, to pay an amount directly related to the amount of the loss.
✔✔Contract of utmost good faith - ✔✔An insurance policy based on the assumption
that the insured has voluntarily revealed to the insurer all information pertinent to the
risk being insured.
✔✔Exculpatory clause (exculpatory agreement) - ✔✔A contractual provision purporting
to excuse a party from liability resulting from negligence or an otherwise wrongful act.
✔✔Executed contract - ✔✔A contract that has been completely performed by both
parties.
✔✔Executory contract - ✔✔A contract that has not been completely performed by one
or both of the parties.
✔✔Express contract - ✔✔A contract whose terms and intentions are explicitly stated.
✔✔Genuine assent - ✔✔Contracting parties' actual assent to form a contract or their
indication of intent to contract by their actions and words.
✔✔Hold-harmless agreement (or indemnity agreement) - ✔✔A contractual provision
that obligates one of the parties to assume the legal liability of another party.
✔✔Implied contract - ✔✔A contract whose terms and intentions are indicated by the
actions of the parties to the contract and the surrounding circumstances
✔✔Implied warranty of title - ✔✔An implied promise in a contract for the sale of goods
that the seller has legal ownership of goods and has no knowledge of any security
interest or other lien on the goods other than those disclosed to the buyer.
✔✔Incidental beneficiary - ✔✔A third-party beneficiary who has no contractual rights but
benefits from a contract even though that is not the intent of the parties to the contract.
✔✔Incompetent - ✔✔person who has impaired judgment and cannot legally enter into
business contracts.
ANSWERS GRADED A+
✔✔Promisor - ✔✔The party to a contract making a promise
✔✔Bilateral contract - ✔✔A contract in which each party promises a performance.
✔✔Collateral estoppel - ✔✔A doctrine that bars parties from relitigating an issue on
which a court has already ruled, even if the second lawsuit differs significantly from the
first.
✔✔Collateral source rule - ✔✔A legal doctrine that provides that the damages owed to
a victim should not be reduced because the victim is entitled to recover money from
other sources, such as an insurance policy.
✔✔Unilateral contract - ✔✔A contract in which only one party makes a promise or
undertakes the requested performance.
✔✔Assignor - ✔✔The party to a contract who makes an assignment
✔✔Bad-faith claim - ✔✔A claim that implies or involves actual or constructive fraud, a
design to mislead or deceive another, or a neglect or refusal to fulfill some good-faith
duty or some contractual good-faith obligation.
✔✔Bilateral mistake - ✔✔A perception by both parties to a contract that does not agree
with the facts
✔✔Capacity to contract - ✔✔A legal qualification that determines one's ability to enter
into an enforceable contract.
✔✔Competent party - ✔✔A party to a contract who has the basic or minimal ability to do
something and the mental ability to understand problems and make decisions.
✔✔Condition concurrent - ✔✔An event that must occur at the same time as another
condition in a contract
✔✔Condition precedent - ✔✔An event that must occur before a duty of performance
arises in a contract.
✔✔Condition subsequent - ✔✔An event that, if it occurs, discharges a duty of
performance in a contract.
✔✔Conditional contract - ✔✔A contract that one or more parties must perform only
under certain conditions.
, ✔✔Contract - ✔✔A legally enforceable agreement between two or more parties in which
each party makes some promise to the other.
✔✔Contract law - ✔✔The branch of civil law that deals with contracts and settles
contract disputes.
✔✔Contract of indemnity - ✔✔A contract in which the insurer agrees, in the event of a
covered loss, to pay an amount directly related to the amount of the loss.
✔✔Contract of utmost good faith - ✔✔An insurance policy based on the assumption
that the insured has voluntarily revealed to the insurer all information pertinent to the
risk being insured.
✔✔Exculpatory clause (exculpatory agreement) - ✔✔A contractual provision purporting
to excuse a party from liability resulting from negligence or an otherwise wrongful act.
✔✔Executed contract - ✔✔A contract that has been completely performed by both
parties.
✔✔Executory contract - ✔✔A contract that has not been completely performed by one
or both of the parties.
✔✔Express contract - ✔✔A contract whose terms and intentions are explicitly stated.
✔✔Genuine assent - ✔✔Contracting parties' actual assent to form a contract or their
indication of intent to contract by their actions and words.
✔✔Hold-harmless agreement (or indemnity agreement) - ✔✔A contractual provision
that obligates one of the parties to assume the legal liability of another party.
✔✔Implied contract - ✔✔A contract whose terms and intentions are indicated by the
actions of the parties to the contract and the surrounding circumstances
✔✔Implied warranty of title - ✔✔An implied promise in a contract for the sale of goods
that the seller has legal ownership of goods and has no knowledge of any security
interest or other lien on the goods other than those disclosed to the buyer.
✔✔Incidental beneficiary - ✔✔A third-party beneficiary who has no contractual rights but
benefits from a contract even though that is not the intent of the parties to the contract.
✔✔Incompetent - ✔✔person who has impaired judgment and cannot legally enter into
business contracts.
