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CPCU 530 - Practice Exam with complete solutions 2024_2025
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CPCU 530 - Practice Exam with complete solutions 2024_2025
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CPCU 530 - Practice Exam with completesolutions 2024/2025
Miguel seeks to insure his personal auto to comply with state regulations. He
contacts an insurance agent who provides Miguel with a personal auto policy
with Atlas Motorist Insurance Company ("Atlas"). Which one of the following best
describes the contractual relationship between Miguel and Atlas?
An express contract
1 multiple choice option
Maria owns a commercial building and places insurance with Bastion Insurance.
Because the annual premium is high, and cash is tight, Maria decides to enter
into a premium finance agreement with Finance Co. ("Finance"). Under the
premium finance agreement, Finance pays Bastion the full annual premium and
Maria pays Finance a monthly amount for the premium, a fee and interest. At the
midpoint of the policy year, which one of the following best describes Maria's
premium finance agreement with Finance?
A bilateral contract
3 multiple choice options
Daniel offers a ride to Lily, a ten-year-old, and takes her to his house where he
locks her in his cellar and demands money from Lily's parents to secure her
return. The parents agree to pay and Lily is returned, but Daniel never receives
the money. He sues Lily's parents for breach of contract. Which one of the
following explains why Daniel's contract with Lily's parents is not legally binding?
It lacks a legal purpose.
3 multiple choice options
Tool Corporation has operated successfully for decades, but in recent years stiff
price competition from overseas suppliers and a lack of skilled labor at affordable
prices have made the company unprofitable. Tool Company has incurred
substantial debt to keep the operation running and save jobs, but they can no
longer access bank financing. Tool Company believes that it can return to
,profitability if it reorganizes. Under which chapter of the bankruptcy code should
Tool Corporation file?
Chapter 11
3 multiple choice options
Located in a small midwestern town, Bin's Deli hires youthful workers and pays
hourly wages. None of their employees are members of a protected class. Which
one of the following legal concepts permits Bin's Deli to release any of its
employees at any time for any reason, or no reason?
Employment at will
3 multiple choice options
Fernanda runs a warehouse in New Jersey. The business is successful because it
has major highway access and is close to major consumer markets.
Manufacturers from around the country store goods bound for Northeastern
customers at Fernanda's warehouse. Given the large amount of goods stored by
others in her warehouse, Fernanda is concerned about her exposure if something
happens to the warehouse or the goods, so she seek advice from a lawyer about
how to limit her exposure to loss. Which one of the following best describes
Fernanda's options in addressing this liability?
UCC Article 7 permits Fernanda to limit her liability through terms in the
warehouse receipt.
3 multiple choice options
In February, Ann contracts with Mahdi to deliver clean garden top soil for $30 a
cubic yard to Mahdi's farm in Pennsylvania. No time for delivery is stated in their
contract but the parties understand that Mahdi wants to use the soil for this
year's planting season. In March, Ann delivers garden soil that is contaminated
and Mahdi refuses to pay because he believes Ann breached their agreement.
Which one of the following best describes how a court would rule on Mahdi's
claim that Ann breached their agreement?
The court would find for Mahdi because Ann's goods are non-conforming.
3 multiple choice options
Diego and Georgia meet in a bar and enjoy cocktails together. Diego has many
more drinks than Georgia and is stumbling and slurring his speech. Sensing an
opportunity, Georgia proposes that Diego sell her his expensive Swiss
wristwatch for a mere $100 and Diego agrees. The next day, Georgia appears at
Diego's office with $100 asking for the wristwatch. Which one of the following
arguments is best for Diego to avoid the contract?
Diego lacked capacity to enter into a contract because he was inebriated.
2 multiple choice options
Erin has worked full-time for the last five years as a librarian for a law firm with
100 attorneys located in a large downtown office building. Erin and her husband
are happy to announce that Erin is expecting a baby in six months. She inquires
, with the law firm's human resources department about her rights for parental
leave under the Family Medical Leave Act (FMLA). Which one of the following
best describes what the law firm must offer Erin under the FMLA?
The law firm must offer Erin up to 12 weeks of unpaid leave in a 12-month period,
with no loss of accrued employment benefits.
3 multiple choice options
Tile Roofing is a contractor specializing in roof installation for homes and
commercial accounts. Recently several Tile Roofing workers have fallen and
suffered significant injuries because the workers do not have any safety
harnesses preventing falls. Under which one of the following employee welfare
laws would Tile Roofing potentially be subject to civil or criminal penalties?
Occupational Safety and Health Act
3 multiple choice options
Mustafa met with his insurance agent Lucy to obtain a businessowners policy.
Lucy helped Mustafa complete an application and sent the signed application
along with Mustafa's premium check to Delmond Insurance Co. Delmond never
responded to Mustafa. Ninety days later, Mustafa had a loss to his business that
would have been covered by the Delmond policy. If Mustafa files suit against
Delmond to receive compensation for his loss,
Mustafa will win, if Delmond's s delay on his application was unreasonable.
3 multiple choice options
Larissa has a property policy covering her auto repair shop. The shop is totally
destroyed by a fire. The process of determining whether and to what extent this
specific loss is covered under Larissa's property policy is known as
Policy analysis.
3 multiple choice options
Which one of the following statements distinguishes estoppel from waiver?
Waiver is contractual in nature and rests upon agreement between parties.
3 multiple choice options
With a contract of indemnity, the insurer agrees, in the event of a covered loss, to
pay
An amount directly related to the amount of loss.
3 multiple choice options
Which one of the following statements is true regarding warranties?
Warranties may be either material or immaterial and are part of the final contract.
3 multiple choice options
If an insurance producer tells an insured that the insured's policy covers
something that it does not, the producer might be liable
For misrepresentation.
3 multiple choice options
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