AIC 301 EXAM QUESTIONS WITH 100% CORRECT
ANSWERS 2025/2026
Which one of the following statements correctly expresses a distinction
between waiver and estoppel?
A. Only waiver prevents an insurer from reviving a defense it has forfeited
earlier.
B. The parol evidence rule applies to estoppel, but not to waiver.
C. Estoppel is contractual in nature, but waiver is equitable in nature.
D. Estoppel requires resulting injury or detriment by the party asserting it. -
ANSWER -D. Estoppel requires resulting injury or detriment by the party
asserting it.
Allison sued George for breach of contract and the term "contractual
consideration" was at issue. In court, the term would be given its
Select one:
A. Legal meaning.
B. Technical meaning.
C. Dictionary definition.
D. Common usage meaning. - ANSWER -A. Legal meaning.
Paul and Jerry were both six years old when they entered a neighbor's home
and used baseball bats to smash and break household items. When
establishing liability for Paul's and Jerry's actions, the court will most likely
primarily consider
Select one:
A. Their vicarious liability as children.
B. It as a mass tort action.
C. It to be liability by conspiracy.
D. The tortfeasors' capacity. - ANSWER -D. The tortfeasors' capacity.
, Andrew promised Katy he would roof her house on October 30. On October
15, Andrew told Katy he could not find the correct shingles and stated he
was probably going to be too busy to do the job. Andrew has
Select one:
A. Not repudiated the contract.
B. Rescinded the contract.
C. Breached the contract.
D. Voided the contract. - ANSWER -A. Not repudiated the contract.
The City of Denbar contracts with Water Company to maintain adequate
water pressure in its fire hydrants. Bob's home in Denbar catches fire and
cannot be saved due to inadequate water pressure. What rights does Bob
have under Denbar's contract with Water Company?
Select one:
A. None, because the contract is with Denbar and Bob is not a named
beneficiary.
B. Bob has enforceable rights under the contract that Denbar negotiated on
behalf of its citizens.
C. Bob is a third-party beneficiary to the contract with fully enforceable
rights.
D. None, because Bob is an incidental beneficiary with no enforceable rights.
- ANSWER -D. None, because Bob is an incidental beneficiary with no
enforceable rights.
Even though an assignor has not yet advised an obligor of an assignment, a
valid assignment is effective
Select one:
A. Immediately.
B. When initially communicated to the assignee.
C. Only if the assignment is in writing.
D. Only when consented to by all parties involved in the assignment -
ANSWER -A. Immediately.
ANSWERS 2025/2026
Which one of the following statements correctly expresses a distinction
between waiver and estoppel?
A. Only waiver prevents an insurer from reviving a defense it has forfeited
earlier.
B. The parol evidence rule applies to estoppel, but not to waiver.
C. Estoppel is contractual in nature, but waiver is equitable in nature.
D. Estoppel requires resulting injury or detriment by the party asserting it. -
ANSWER -D. Estoppel requires resulting injury or detriment by the party
asserting it.
Allison sued George for breach of contract and the term "contractual
consideration" was at issue. In court, the term would be given its
Select one:
A. Legal meaning.
B. Technical meaning.
C. Dictionary definition.
D. Common usage meaning. - ANSWER -A. Legal meaning.
Paul and Jerry were both six years old when they entered a neighbor's home
and used baseball bats to smash and break household items. When
establishing liability for Paul's and Jerry's actions, the court will most likely
primarily consider
Select one:
A. Their vicarious liability as children.
B. It as a mass tort action.
C. It to be liability by conspiracy.
D. The tortfeasors' capacity. - ANSWER -D. The tortfeasors' capacity.
, Andrew promised Katy he would roof her house on October 30. On October
15, Andrew told Katy he could not find the correct shingles and stated he
was probably going to be too busy to do the job. Andrew has
Select one:
A. Not repudiated the contract.
B. Rescinded the contract.
C. Breached the contract.
D. Voided the contract. - ANSWER -A. Not repudiated the contract.
The City of Denbar contracts with Water Company to maintain adequate
water pressure in its fire hydrants. Bob's home in Denbar catches fire and
cannot be saved due to inadequate water pressure. What rights does Bob
have under Denbar's contract with Water Company?
Select one:
A. None, because the contract is with Denbar and Bob is not a named
beneficiary.
B. Bob has enforceable rights under the contract that Denbar negotiated on
behalf of its citizens.
C. Bob is a third-party beneficiary to the contract with fully enforceable
rights.
D. None, because Bob is an incidental beneficiary with no enforceable rights.
- ANSWER -D. None, because Bob is an incidental beneficiary with no
enforceable rights.
Even though an assignor has not yet advised an obligor of an assignment, a
valid assignment is effective
Select one:
A. Immediately.
B. When initially communicated to the assignee.
C. Only if the assignment is in writing.
D. Only when consented to by all parties involved in the assignment -
ANSWER -A. Immediately.
