CPCU 530 LATEST UPDATE 2025
Civil Law - ANSWER Comprehensive codes of written laws or statutes that apply to all
legal questions. These systems rely on scholarly interpretations of their codes and
constitutions rather than on court decisions
Common Law - ANSWER Body of law derived from court decisions as opposed to
statutes or constitutions.
Doctrine of Stare Decisis - ANSWER Principle that lower courts must follow precedents
set by higher courts
Substantive Law - ANSWER Classification of law that creates, defines, and regulates
parties' rights, duties, and powers. It governs the merits of the case, which are based on
the facts giving rise to the lawsuit.
Procedural Law - ANSWER Classification of law that prescribes the steps, or
processes, for enforcing the rights and duties defined by the substantive law. It involves
the procedures or mechanics of court processes and the methods used to enforce
substantive law.
Executive Branch - ANSWER Led by president on federal level and governors on state
level; Has power to recommend, approve, or veto laws and to administer and carry out
many laws through administrative agencies. Its checks on the other two branches
include the power to appoint judges and the power to veto laws passed by the
legislative branch.
Legislative Branch - ANSWER Federal congress and state legislatures; has power to
pass laws. Branch's check on the other two branches include its power to approve or
deny many executive's appointments, and its ability to pass constitutional laws negating
judicial opinions.
Judicial Branch - ANSWER The courts; interpret, affirm, or negate laws. Checks on the
other two branches include the power to declare laws, and sometimes actions or
regulations of the executive branch unconstitutional or unlawful
Writ of certiorari - ANSWER An appellate courts order directing a lower court to deliver
its record in a case for appellate review
Rules of evidence - ANSWER It must be relevant, material, and competent
Administrative agencies have two main functions - ANSWER Rulemaking and
adjudication
,Admin. Agencies three types of rules - ANSWER Legislative, interpretative, and
procedural
Valid assignment - ANSWER Requires neither formality nor writing, Any words or
actions that indicate the assignor's intention to transfer contractual rights effects a valid
assignment
Contract must have 4 elements - ANSWER Agreement, capacity to contract,
consideration, and legal purpose
Executed contract - ANSWER Contract that has been completely performed by both
parties
Executory contract - ANSWER A contract that has not been completely performed by
one or both of the parties
Implied contract - ANSWER A contract whose terms and intentions are indicated by the
actions of the parties to the contract and the surrounding circumstances
Express contract - ANSWER A contract whose terms and intentions are explicitly stated
Implied-In-Fact Contract - ANSWER A contract that is not express but that the parties
presumably intended, either by tacit understanding or by the assumption that it existed.
Implied-in-law contract - ANSWER An obligation that is not an actual contract but that is
imposed by law because of the parties' conduct or some special relationship between
them or because one of them would otherwise be unjustly enriched
Voidable contract - ANSWER A contract that one of the parties can reject (avoid) based
on some circumstance surrounding its execution
An apparently valid contract may be unenforceable if either party has not given genuine
assent to contract. GA may be lacking if a party was induced to enter a contract by any
of the following - ANSWER 1) Fraud
2) Mistake - Unilateral mistake - perception by one party to a contract that does not
agree with the facts / Bilateral mistake - A perception by both parties to a contract that
does not agree with the facts
3) Duress - The use of restraint, violence, or threats of violence to compel a party to act
contrary to his or her wishes or interests
4) Undue Influence - The improper use of power or trust to deprive a person of free will
and substitute another's objective, resulting in lack of genuine assent to a contract
5) Innocent Misrepresentation
6 Elements of Fraud: - ANSWER 1. A false representation
2. Of a material fact
3. Knowingly made
, 4. With intent to deceive
5. On which the other party has placed justifiable reliance
6. To his/her detriment
For contract purposes, an offer is valid if it includes: - ANSWER 1. An intent to contract
2. Definite Terms
3. Communication to the other party
Unilateral Contract - ANSWER contract in which only one party makes a promise or
undertakes the requested performance
Bilateral Contract - ANSWER Contract in which each party promises a performance
Elements of Acceptance - ANSWER Acceptance by the offeree, unconditional and
unequivocal, offeree's communication of acceptance to offeror by appropriate word or
act
Consideration - ANSWER Something of value or bargained for and exchanged by the
parties to a contract
Consideration necessary to make a promise enforceable can be one of the following -
ANSWER A return promise, An act performed, or A forbearance from acting
Types of Consideration: - ANSWER 1. Valuable Consideration
2. Forbearance
3. Present Consideration
4. Future Consideration
5. Binding Promises
Nonperformance - ANSWER Right the insurer has against the insured when a material
breach occurs
Rights not assignable: - ANSWER 1. Assignment of veterans' disability benefits,
government pensions, wages, inheritances, and WC benefits
2. Personal rights
3. When an assignment materially alters or varies the obligor's performance
4. When a judgment is pending in a personal injury case, generally the injured person
cannot assign a claim for damages resulting from the injury
5. The parties to an agreement might specify that they cannot, under the contract,
assign the rights.
Types of Damages: - ANSWER 1. Compensatory - Payment awarded by a court to
reimburse a victim for actual harm
2. Consequential - Payment awarded to indemnify an injured arty for losses that result
indirectly from a wrong such as a breach of contract or tort
Civil Law - ANSWER Comprehensive codes of written laws or statutes that apply to all
legal questions. These systems rely on scholarly interpretations of their codes and
constitutions rather than on court decisions
Common Law - ANSWER Body of law derived from court decisions as opposed to
statutes or constitutions.
Doctrine of Stare Decisis - ANSWER Principle that lower courts must follow precedents
set by higher courts
Substantive Law - ANSWER Classification of law that creates, defines, and regulates
parties' rights, duties, and powers. It governs the merits of the case, which are based on
the facts giving rise to the lawsuit.
Procedural Law - ANSWER Classification of law that prescribes the steps, or
processes, for enforcing the rights and duties defined by the substantive law. It involves
the procedures or mechanics of court processes and the methods used to enforce
substantive law.
Executive Branch - ANSWER Led by president on federal level and governors on state
level; Has power to recommend, approve, or veto laws and to administer and carry out
many laws through administrative agencies. Its checks on the other two branches
include the power to appoint judges and the power to veto laws passed by the
legislative branch.
Legislative Branch - ANSWER Federal congress and state legislatures; has power to
pass laws. Branch's check on the other two branches include its power to approve or
deny many executive's appointments, and its ability to pass constitutional laws negating
judicial opinions.
Judicial Branch - ANSWER The courts; interpret, affirm, or negate laws. Checks on the
other two branches include the power to declare laws, and sometimes actions or
regulations of the executive branch unconstitutional or unlawful
Writ of certiorari - ANSWER An appellate courts order directing a lower court to deliver
its record in a case for appellate review
Rules of evidence - ANSWER It must be relevant, material, and competent
Administrative agencies have two main functions - ANSWER Rulemaking and
adjudication
,Admin. Agencies three types of rules - ANSWER Legislative, interpretative, and
procedural
Valid assignment - ANSWER Requires neither formality nor writing, Any words or
actions that indicate the assignor's intention to transfer contractual rights effects a valid
assignment
Contract must have 4 elements - ANSWER Agreement, capacity to contract,
consideration, and legal purpose
Executed contract - ANSWER Contract that has been completely performed by both
parties
Executory contract - ANSWER A contract that has not been completely performed by
one or both of the parties
Implied contract - ANSWER A contract whose terms and intentions are indicated by the
actions of the parties to the contract and the surrounding circumstances
Express contract - ANSWER A contract whose terms and intentions are explicitly stated
Implied-In-Fact Contract - ANSWER A contract that is not express but that the parties
presumably intended, either by tacit understanding or by the assumption that it existed.
Implied-in-law contract - ANSWER An obligation that is not an actual contract but that is
imposed by law because of the parties' conduct or some special relationship between
them or because one of them would otherwise be unjustly enriched
Voidable contract - ANSWER A contract that one of the parties can reject (avoid) based
on some circumstance surrounding its execution
An apparently valid contract may be unenforceable if either party has not given genuine
assent to contract. GA may be lacking if a party was induced to enter a contract by any
of the following - ANSWER 1) Fraud
2) Mistake - Unilateral mistake - perception by one party to a contract that does not
agree with the facts / Bilateral mistake - A perception by both parties to a contract that
does not agree with the facts
3) Duress - The use of restraint, violence, or threats of violence to compel a party to act
contrary to his or her wishes or interests
4) Undue Influence - The improper use of power or trust to deprive a person of free will
and substitute another's objective, resulting in lack of genuine assent to a contract
5) Innocent Misrepresentation
6 Elements of Fraud: - ANSWER 1. A false representation
2. Of a material fact
3. Knowingly made
, 4. With intent to deceive
5. On which the other party has placed justifiable reliance
6. To his/her detriment
For contract purposes, an offer is valid if it includes: - ANSWER 1. An intent to contract
2. Definite Terms
3. Communication to the other party
Unilateral Contract - ANSWER contract in which only one party makes a promise or
undertakes the requested performance
Bilateral Contract - ANSWER Contract in which each party promises a performance
Elements of Acceptance - ANSWER Acceptance by the offeree, unconditional and
unequivocal, offeree's communication of acceptance to offeror by appropriate word or
act
Consideration - ANSWER Something of value or bargained for and exchanged by the
parties to a contract
Consideration necessary to make a promise enforceable can be one of the following -
ANSWER A return promise, An act performed, or A forbearance from acting
Types of Consideration: - ANSWER 1. Valuable Consideration
2. Forbearance
3. Present Consideration
4. Future Consideration
5. Binding Promises
Nonperformance - ANSWER Right the insurer has against the insured when a material
breach occurs
Rights not assignable: - ANSWER 1. Assignment of veterans' disability benefits,
government pensions, wages, inheritances, and WC benefits
2. Personal rights
3. When an assignment materially alters or varies the obligor's performance
4. When a judgment is pending in a personal injury case, generally the injured person
cannot assign a claim for damages resulting from the injury
5. The parties to an agreement might specify that they cannot, under the contract,
assign the rights.
Types of Damages: - ANSWER 1. Compensatory - Payment awarded by a court to
reimburse a victim for actual harm
2. Consequential - Payment awarded to indemnify an injured arty for losses that result
indirectly from a wrong such as a breach of contract or tort
