CPCU 530 ACTUAL EXAM PAPER 2026
QUESTIONS WITH VERIFIED CORRECT
SOLUTIONS
⩥ Which one of the following legal systems relies on scholarly
interpretations of written codes and constitutions, rather than on court
decisions? Answer: The civil-law system (The civil-law system relies on
scholarly interpretations of written codes and constitutions, rather than
on court decisions. ("Common-law system" vs. "civil-law system"
should not be confused with "criminal law" vs. "civil law." The former
describe entire legal systems, while the latter describe classifications of
U.S. law.)
⩥ The Twenty-sixth Amendment to the U.S. Constitution sets the
minimum voting age at 18. Assume that, after the amendment was
ratified, the U.S. Congress passed a law that prohibited the right to vote
for anyone under the age of 21 who had not registered for military
conscription. West Virginia likewise passed a law that limited the
minimum voting age to 19 for all West Virginia citizens. The U.S.
President then issued an Executive Order that forbade any person under
the age of 20 with unpaid traffic tickets from voting. The earliest legal
voting age for a West Virginia citizen with unpaid traffic tickets who had
not registered for military conscription is. Answer: 18 (The earliest legal
voting age for a West Virginia citizen with unpaid traffic tickets who had
not registered for military conscription is 18. Any law that violates the
U.S. Constitution, whether state or federal, is void.)
,⩥ Scott is presented as a witness for the plaintiff in a trail. Carla, the
plaintiff, alleges that she was seriously injured when she was struck by a
vehicle driven by Luke, who was under the influence of alcohol at the
time. Scott testifies that Luke had been drinking heavily at happy hour
on the day of the accident. Under cross-examination, Scott admits that
he was not actually at the happy hour, but that a number of co-workers
had told him about Luke's drinking that day. Scott's testimony may be
challenged under which one of the following conditions under the rules
of evidence?. Answer: Competent (Scott's testimony may be challenged
on the basis of competence. He is repeating a statement (hearsay), but
does not have personal knowledge of whether the statement is true.)
⩥ Which one of the following most accurately describes the role of the
mediator in alternative dispute resolution?. Answer: A mediator is a
neutral third party who acts as a catalyst to help parties analyze their
dispute, consider possible solutions, and devise a compromise formula.
(A mediator is a neutral third party who acts as a catalyst to help parties
analyze their dispute, consider possible solutions, and devise a
compromise formula.)
⩥ Under contract law, the improper use of power or trust to deprive a
person of free will and to substitute his or her objective with someone
else's is called. Answer: Undue influence. (The improper use of power or
trust to deprive a person of free will and to substitute his or her objective
with someone else's is undue influence. Fraud is the misrepresentation of
facts that causes harm to another. Duress is the use of restraint, violence,
threats of violence, or wrongful pressure to compel a party to act
,contrary to his or her wishes or interests. Innocent misrepresentation is
similar to fraud but without intention.)
⩥ Katie purchased several hundred acres and was considering building
houses on the land and turning it into a residential subdivision. Katie
made a contract with Leah, whereby Leah promised to do all plumbing
work Katie needed in the subdivision, and Katie promised to only hire
Leah if she decided to build houses on the land. This contract is.
Answer: Unenforceable, for lack of valid consideration. (This contract is
unenforceable, for lack of valid consideration. A party's promise to pay
for any work it might request of another party is not binding because the
promisor might ask for no work. (Requirements contracts and output
contracts can be exceptions.)
⩥ Which one of the following most accurately describes the ability of an
offeror to revoke an offer made to an individual offeree?. Answer: An
offeror can revoke an offer any time before acceptance, but the
revocation is effective only when communicated to the offeree and the
offeree actually receives the communication. (An offeror can revoke an
offer any time before acceptance, but the revocation is effective only
when communicated to the offeree and the offeree actually receives the
communication.)
⩥ Carolina was a counterfeiter. She sought a property insurance policy
on the warehouse where her counterfeiting operations took place, as well
as a business interruption insurance policy on the operations themselves.
Both Carolina and her insurance producer believed that these policies
would be valid and enforceable. They also both incorrectly believed that
, the property insurance policy covered lightning strikes. Lightning was
extremely rare in Carolina's area and had never caused damage to any
buildings in the past. Which one of the following statements is true?.
Answer: The property policy is enforceable, and the business
interruption policy is void. (The property policy is enforceable, and the
business interruption policy is void. Insurance contracts must involve
legal subject matter. But if the insurance is only incidental to an illegal
purpose, then the contract is enforceable.)
⩥ Margaret, who had been drinking all evening at a business meeting,
signed and mailed a written offer to sell 1,000 shares of a particular
stock to Frank which, unknown to her, would make Frank the majority
shareholder in that company's stock. Frank was unaware that Margaret
had been intoxicated at the time she formed the contract. Under these
circumstances Margaret. Answer: Cannot avoid the contract. (Margaret
can attempt to avoid the contract but Frank can claim lack of knowledge
of Margaret's condition and most likely the contract will be enforced.)
⩥ Brenda offered to sell her collection of gemstones to Jolene for
$25,000, and Jolene told her brother Kevin about Brenda's offer. When
Jolene died in an auto accident, Kevin, as executor of Jolene's estate,
tried to accept Brenda's offer to sell the collection. Kevin's acceptance
on behalf of the estate is. Answer: Not enforceable because the offeror
has the right to choose with whom to contract. (Kevin's acceptance on
behalf of the estate is not enforceable because the offeror has the right to
choose with whom to contract.)
QUESTIONS WITH VERIFIED CORRECT
SOLUTIONS
⩥ Which one of the following legal systems relies on scholarly
interpretations of written codes and constitutions, rather than on court
decisions? Answer: The civil-law system (The civil-law system relies on
scholarly interpretations of written codes and constitutions, rather than
on court decisions. ("Common-law system" vs. "civil-law system"
should not be confused with "criminal law" vs. "civil law." The former
describe entire legal systems, while the latter describe classifications of
U.S. law.)
⩥ The Twenty-sixth Amendment to the U.S. Constitution sets the
minimum voting age at 18. Assume that, after the amendment was
ratified, the U.S. Congress passed a law that prohibited the right to vote
for anyone under the age of 21 who had not registered for military
conscription. West Virginia likewise passed a law that limited the
minimum voting age to 19 for all West Virginia citizens. The U.S.
President then issued an Executive Order that forbade any person under
the age of 20 with unpaid traffic tickets from voting. The earliest legal
voting age for a West Virginia citizen with unpaid traffic tickets who had
not registered for military conscription is. Answer: 18 (The earliest legal
voting age for a West Virginia citizen with unpaid traffic tickets who had
not registered for military conscription is 18. Any law that violates the
U.S. Constitution, whether state or federal, is void.)
,⩥ Scott is presented as a witness for the plaintiff in a trail. Carla, the
plaintiff, alleges that she was seriously injured when she was struck by a
vehicle driven by Luke, who was under the influence of alcohol at the
time. Scott testifies that Luke had been drinking heavily at happy hour
on the day of the accident. Under cross-examination, Scott admits that
he was not actually at the happy hour, but that a number of co-workers
had told him about Luke's drinking that day. Scott's testimony may be
challenged under which one of the following conditions under the rules
of evidence?. Answer: Competent (Scott's testimony may be challenged
on the basis of competence. He is repeating a statement (hearsay), but
does not have personal knowledge of whether the statement is true.)
⩥ Which one of the following most accurately describes the role of the
mediator in alternative dispute resolution?. Answer: A mediator is a
neutral third party who acts as a catalyst to help parties analyze their
dispute, consider possible solutions, and devise a compromise formula.
(A mediator is a neutral third party who acts as a catalyst to help parties
analyze their dispute, consider possible solutions, and devise a
compromise formula.)
⩥ Under contract law, the improper use of power or trust to deprive a
person of free will and to substitute his or her objective with someone
else's is called. Answer: Undue influence. (The improper use of power or
trust to deprive a person of free will and to substitute his or her objective
with someone else's is undue influence. Fraud is the misrepresentation of
facts that causes harm to another. Duress is the use of restraint, violence,
threats of violence, or wrongful pressure to compel a party to act
,contrary to his or her wishes or interests. Innocent misrepresentation is
similar to fraud but without intention.)
⩥ Katie purchased several hundred acres and was considering building
houses on the land and turning it into a residential subdivision. Katie
made a contract with Leah, whereby Leah promised to do all plumbing
work Katie needed in the subdivision, and Katie promised to only hire
Leah if she decided to build houses on the land. This contract is.
Answer: Unenforceable, for lack of valid consideration. (This contract is
unenforceable, for lack of valid consideration. A party's promise to pay
for any work it might request of another party is not binding because the
promisor might ask for no work. (Requirements contracts and output
contracts can be exceptions.)
⩥ Which one of the following most accurately describes the ability of an
offeror to revoke an offer made to an individual offeree?. Answer: An
offeror can revoke an offer any time before acceptance, but the
revocation is effective only when communicated to the offeree and the
offeree actually receives the communication. (An offeror can revoke an
offer any time before acceptance, but the revocation is effective only
when communicated to the offeree and the offeree actually receives the
communication.)
⩥ Carolina was a counterfeiter. She sought a property insurance policy
on the warehouse where her counterfeiting operations took place, as well
as a business interruption insurance policy on the operations themselves.
Both Carolina and her insurance producer believed that these policies
would be valid and enforceable. They also both incorrectly believed that
, the property insurance policy covered lightning strikes. Lightning was
extremely rare in Carolina's area and had never caused damage to any
buildings in the past. Which one of the following statements is true?.
Answer: The property policy is enforceable, and the business
interruption policy is void. (The property policy is enforceable, and the
business interruption policy is void. Insurance contracts must involve
legal subject matter. But if the insurance is only incidental to an illegal
purpose, then the contract is enforceable.)
⩥ Margaret, who had been drinking all evening at a business meeting,
signed and mailed a written offer to sell 1,000 shares of a particular
stock to Frank which, unknown to her, would make Frank the majority
shareholder in that company's stock. Frank was unaware that Margaret
had been intoxicated at the time she formed the contract. Under these
circumstances Margaret. Answer: Cannot avoid the contract. (Margaret
can attempt to avoid the contract but Frank can claim lack of knowledge
of Margaret's condition and most likely the contract will be enforced.)
⩥ Brenda offered to sell her collection of gemstones to Jolene for
$25,000, and Jolene told her brother Kevin about Brenda's offer. When
Jolene died in an auto accident, Kevin, as executor of Jolene's estate,
tried to accept Brenda's offer to sell the collection. Kevin's acceptance
on behalf of the estate is. Answer: Not enforceable because the offeror
has the right to choose with whom to contract. (Kevin's acceptance on
behalf of the estate is not enforceable because the offeror has the right to
choose with whom to contract.)
