CPCU 530 Actual Exam Update

CPCU 530 Actual Exam Update CPCU Exam Latest Different Versions Questions and Correct Answers Rated A+

Persons claiming insanity may avoid a contract when

Select one:

• They were experiencing a delusion.
• The contract is for necessaries.
• The contract was formed during an interval of time in which two or more

independent third parties are willing to attest to the person's inability to contract.

• They did not know that a contract was forming or they did not

understand the legal consequences of acts purporting to form the contract.-ANSWER-D. They did not know that a contract was forming or they did not understand the legal consequences of acts purporting to form the contract.

Merve filed for bankruptcy a few years ago. One of the debts included in her bankruptcy was a car loan financed by Lending Bank for $8,000. Which one of the following correctly describes whether Merve must do anything before Lending Back can enforce a new promise by Merve to pay this debt and make payments once again on this contract?

Select one:

• Merve need provide no additional consideration.
• Merve must make no additional promises to pay.

• Merve must acknowledge the debt.
• Merve must pay additional consideration. -ANSWER-A. Merve need

provide no additional consideration.

Jessica, age 21, promised a 1995 Ford as a gift to her friend, Michelle, age

• Which one of the following is the missing element that would make this

gift transaction a contract?

Select one:

• Consideration.
• Assent
• Capacity
• Legal purpose -ANSWER-A. Consideration Correct. Consideration

makes a promise a contract. A promise to make a gift or to do something without receiving consideration in return is not enforceable. It is merely a gratuitous promise.

Public policy requires that the insured have an insurable interest in any property or life to be covered by the policy. A person has an insurable interest in property if its destruction would cause direct monetary loss. In order to be covered, this insurable interest must exist

Select one:

• Prior to the loss.
• When the loss is reported.
• At the time of loss.
• When the property is acquired. -ANSWER-C. At the time of loss

Any contract allowing a lender more than the maximum legal interest is a usury contract and is therefore illegal. Which one of the following is true in most states if a lender is charging an illegally high rate of interest on a loan?

Select one:

• The lender may collect the principal but is fined for usury action equal to

the exorbitant rate of interest previously charged.

• The lender may collect the principal but is barred from collecting the

interest.

• The lender may not collect either the principal or the lost interest.
• The lender may collect the principal and the lowest market interest rate.

-ANSWER-B. The lender may collect the principal but is barred from collecting the interest.

Contracts may be illegal because they are against public policy or because they are contrary to constitutional, statutory, or

Select one:

• Interstate law.
• Tort law.
• Case law.
• Criminal law. -ANSWER-C. Case law.

Which one of the following is true regarding a void contract?

Select one:

• A void contract is a contract in which the parties can execute it

completely unless an innocent party chooses to avoid it.

• A void contract is not legally enforceable or binding.

• A contract with a minor is always a void contract.
• A void contract is entered into under fraud or duress. -ANSWER-B. A

void contract is not legally enforceable or binding.

Which one of the following contract types requires each party to perform?

Select one:

• Unilateral
• Mutual
• Implied
• Bilateral -ANSWER-D. Bilateral

The type of contract that is an obligation imposed by law because of the parties' conduct or some special relationship between them or because one of them would otherwise be unjustly enriched is a quasi-contract also known as

Select one:

• An implied-in-fact contract.
• An implied-in-law contract.
• A voidable contract.
• An executory contract. -ANSWER-B. An implied-in-law contract.

The type of contract that has not been completely performed by one or both of the parties is

Select one:

• An implied-in-fact contract.
• A voidable contract.
• An implied-in-law contract.