CPCU 530 Test Questions with Correct Answers

CPCU 530 Test Questions with Correct Answers Bailor - Answer-The owner of the personal property in a bailment. 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 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 Indemnify - Answer-To restore a party who has sustained a loss to the same financial position that party held before the loss occurred. Accession - Answer-An increase or addition to property. Doctrine of stare decisis - Answer-The principle that lower courts must follow precedents set by higher courts Equity - Answer-Fairness, or a body of principles constituting what is fair and right Criminal law - Answer-The branch of the law that imposes penalties for wrongs against society Substantive law - Answer-classification of law that creates, defines, and regulates parties' rights, duties, and powers. Procedural law - Answer-A classification of law that prescribes the steps, or processes, for enforcing the rights and duties defined by substantive law. Equal Protection Clause - Answer-A part of the Fourteenth Amendment to the U.S. Constitution prohibiting state laws that discriminate unfairly or arbitrarily, and requiring equal treatment to all persons under like circumstances and conditions Arbitration - Answer-An alternative dispute resolution (ADR) method by which disputing parties use a neutral outside party to examine the issues and develop a settlement, which can be final and binding. Consideration - Answer-Something of value or bargained for and exchanged by the parties to a contract. Third-party beneficiary - Answer-A person who is not a party to a contract but who benefits from it and has a legal right to enforce the contract if it is breached by either of the contracting parties. Third-party beneficiary contract - Answer-A contract between two parties that benefits a third party Privity of contract - Answer-The relationship that exists between the parties to a contract. Bad faith (outrage) - Answer-An intentional or reckless act, extreme or outrageous in nature, causing severe emotional distress that results in physical injury; generally applied in suits for breach of insurance contracts. Breach of contract - Answer-The failure, without legal excuse, to fulfill a contractual promise Consequential damages - Answer-A payment awarded by a court to indemnify an injured party for losses that result indirectly from a wrong such as a breach of contract or a tort. Express waiver - Answer-A statement relinquishing a right that arose because of a breach of contract Tort - Answer-a wrongful act or an omission, other than a crime or a breach of contract, that invades a legally protected right. Tort law - Answer-The branch of civil law that deals with civil wrongs other than breaches of contract. Promisor - Answer-The party to a contract making a promise Bilateral contract - Answer-A contract in which each party promises a performance. Collateral estoppel - Answer-A doctrine that bars parties from relitigating an issue on which a court has already ruled, even if the second lawsuit differs significantly from the first.