AIC 301 TEST PREP QUESTIONS AND
ANSWERS VERIFIED STUDY SHEET
●● 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
Select one:
A. A unilateral contract.
B. An implied-in-law contract.
C. An implied-in-fact contract.
D. An executory contract.
Answer: B. An implied-in-law contract.
●● One purpose served by a bill of lading is to serve as
Select one:
A. An endorsement to a document of title.
B. A description of goods in a warehouse.
C. The receipt of goods by the carrier for delivery.
D. A contract for the storage of goods.
,Answer: C. The receipt of goods by the carrier for delivery.
●● Jack and JoAnn who are spouses, live in a western state of the
United States and when they divorced they equally shared all property
acquired while they were married. There was also property owned
individually at the time they were married as well as property inherited
by JoAnn. Their state is using laws relating to
Select one:
A. Jointly titled property.
B. Separate property.
C. Community property.
D. Property in its entirety.
Answer: C. Community property.
●● Which one of the following rights is assignable under the general
rule of contract law?
Select one:
A. The right to receive veteran disability benefits
B. The right to sue for damage for property loss or damage
C. The right to assign personal duties
D. The right to receive workers compensation benefits
Answer: B. The right to sue for damage for property loss or damage
,●● Alva had an auto insurance policy written by Guilford Insurance Co.
Alva had an auto accident with Furkan. Furkan was injured in the
accident and he filed suit against Guilford for his damages. Guilford
filed a motion to dismiss the lawsuit, claiming that Furkan had no right
to sue Guilford. Which one of the following correctly states how the
court will rule on Guilford's motion?
Select one:
A. The motion will be denied, if Alva asks Guilford to permit Furkan to
sue Guilford.
B. The motion will be denied because liability insurers generally owe a
duty to third-party claimants.
C. The motion will be denied, if a direct-action statute has been enacted.
D. The motion will be denied because third parties may sue insurers of
negligent parties.
Answer: C. The motion will be denied, if a direct-action statute has been
enacted.
●● Mikael, a new insurance agent, sent a letter to all residents of his
apartment complex that set out the basic terms of a renter's policy and
stated: "I will issue this policy to you and expect your $300 annual
premium if I don't hear from you to the contrary within 30 days."
Linnea, a neighbor, received this letter but did not respond. Which one
of the following statements about Linnea's legal obligation under
contract law is true?
Select one:
, A. Linnea has no legal obligation to pay Mikael $300 because silence
can never constitute acceptance.
B. Linnea is legally obligated to pay Mikael $300.
C. Linnea is legally obligated to pay Mikael $300 unless she objects
within 30 days.
D. Linnea has no legal obligation to pay Mikael $300 because no prior
course of dealing supports this.
Answer: D. Linnea has no legal obligation to pay Mikael $300 because
no prior course of dealing supports this.
●● Jill's mother, Amy, contracted with Pete to sell him some lawn
equipment for $600. Jill needed $200 for college textbooks so Amy
asked Pete to give Jill $200 of the $600 he owed to her. Amy received
$400 and Jill received $200. In this situation Jill is the
Select one:
A. Third-party beneficiary.
B. Unintended donee.
C. Promisee.
D. Promisor.
Answer: A. Third-party beneficiary.
●● An insurance contract is often said to be a contract of adhesion.
Which one of the following is the basis of this characteristic of insurance
contracts?
ANSWERS VERIFIED STUDY SHEET
●● 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
Select one:
A. A unilateral contract.
B. An implied-in-law contract.
C. An implied-in-fact contract.
D. An executory contract.
Answer: B. An implied-in-law contract.
●● One purpose served by a bill of lading is to serve as
Select one:
A. An endorsement to a document of title.
B. A description of goods in a warehouse.
C. The receipt of goods by the carrier for delivery.
D. A contract for the storage of goods.
,Answer: C. The receipt of goods by the carrier for delivery.
●● Jack and JoAnn who are spouses, live in a western state of the
United States and when they divorced they equally shared all property
acquired while they were married. There was also property owned
individually at the time they were married as well as property inherited
by JoAnn. Their state is using laws relating to
Select one:
A. Jointly titled property.
B. Separate property.
C. Community property.
D. Property in its entirety.
Answer: C. Community property.
●● Which one of the following rights is assignable under the general
rule of contract law?
Select one:
A. The right to receive veteran disability benefits
B. The right to sue for damage for property loss or damage
C. The right to assign personal duties
D. The right to receive workers compensation benefits
Answer: B. The right to sue for damage for property loss or damage
,●● Alva had an auto insurance policy written by Guilford Insurance Co.
Alva had an auto accident with Furkan. Furkan was injured in the
accident and he filed suit against Guilford for his damages. Guilford
filed a motion to dismiss the lawsuit, claiming that Furkan had no right
to sue Guilford. Which one of the following correctly states how the
court will rule on Guilford's motion?
Select one:
A. The motion will be denied, if Alva asks Guilford to permit Furkan to
sue Guilford.
B. The motion will be denied because liability insurers generally owe a
duty to third-party claimants.
C. The motion will be denied, if a direct-action statute has been enacted.
D. The motion will be denied because third parties may sue insurers of
negligent parties.
Answer: C. The motion will be denied, if a direct-action statute has been
enacted.
●● Mikael, a new insurance agent, sent a letter to all residents of his
apartment complex that set out the basic terms of a renter's policy and
stated: "I will issue this policy to you and expect your $300 annual
premium if I don't hear from you to the contrary within 30 days."
Linnea, a neighbor, received this letter but did not respond. Which one
of the following statements about Linnea's legal obligation under
contract law is true?
Select one:
, A. Linnea has no legal obligation to pay Mikael $300 because silence
can never constitute acceptance.
B. Linnea is legally obligated to pay Mikael $300.
C. Linnea is legally obligated to pay Mikael $300 unless she objects
within 30 days.
D. Linnea has no legal obligation to pay Mikael $300 because no prior
course of dealing supports this.
Answer: D. Linnea has no legal obligation to pay Mikael $300 because
no prior course of dealing supports this.
●● Jill's mother, Amy, contracted with Pete to sell him some lawn
equipment for $600. Jill needed $200 for college textbooks so Amy
asked Pete to give Jill $200 of the $600 he owed to her. Amy received
$400 and Jill received $200. In this situation Jill is the
Select one:
A. Third-party beneficiary.
B. Unintended donee.
C. Promisee.
D. Promisor.
Answer: A. Third-party beneficiary.
●● An insurance contract is often said to be a contract of adhesion.
Which one of the following is the basis of this characteristic of insurance
contracts?
