CPCU 530 (Everything) Questions &
Answer
Doctrine of stare decisis - answer The principle that lower courts must follow
precedents set by higher courts.
Criminal law - answer The branch of the law that imposes penalties for wrongs
against society.
Civil law - answer A classification of law that applies to legal matters not governed by
criminal law and that protects rights and provides remedies for breaches of duties owed
to others.
Substantive law - answer A 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.
National Association of Insurance Commissioners (NAIC) - answer An association of
insurance commissioners from the 50 U.S. states, the District of Columbia, and the five
U.S. territories and possessions, whose purpose is to coordinate insurance regulation
activities among the various state insurance departments.
Diversity jurisdiction - answer The authority of federal district courts to hear cases
involving parties from different states that involve amounts in controversy over a legal
minimum.
Allegation - answer A claim made in the complaint by the plaintiff, specifying what
the plaintiff expects to prove to obtain a judgment against the defendant.
Complaint - answer The allegations made by a plaintiff in a lawsuit.
Pleading - answer A formal written statement of the facts and claims of each party to
a lawsuit
Motion - answer A formal request for the court to take a particular action
Discovery - answer A pretrial exchange of all relevant information between the
plaintiff and defendant.
Relevance - answer A quality of evidence that is likely to prove or disprove an
element of the case.
,General verdict - answer A kind of verdict that entails a complete finding and a single
conclusion by a jury on all issues presented.
Special verdict - answer A kind of verdict reached by a jury that makes findings of
fact by answering specific questions posed by the judge. The judge then applies the law
to the facts as the jury has found them.
Res judicata - answer A doctrine that bars parties to a lawsuit on which final
judgment has been rendered from bringing a second lawsuit on the same claim or on
related transactions.
Alternative dispute resolution (ADR) - answer Procedures to help settle disputes
without litigation, including arbitration, mediation, and negotiation.
Mediation - answer An alternative dispute resolution (ADR) method by which
disputing parties use a neutral outside party to examine the issues and develop a
mutually agreeable settlement.
Legislative rule - answer A type of substantive administrative agency rule that comes
from a statutory delegation of authority and that has the same force as a law enacted by
Congress or a legislature.
Interpretative rule - answer A type of administrative agency rule that interprets
statutes, providing guidance for agency staff or regulated parties, but that lacks the
force and effect of law and therefore is not binding on individuals.
Procedural rule - answer A type of administrative agency rule that prescribes
procedures for agency operations, legislative rulemaking, and adjudication proceedings.
Standing to sue - answer A party's right to sue, as one who has suffered or will suffer
a legal wrong or an adverse effect from an action.
Final order - answer An administrative agency's final conclusion or disposition of any
material private right of a party, terminating an agency proceeding.
Exhaustion of administrative remedies - answer The completion of all possible
administrative procedures and appeals in a case; required before a party can appeal an
agency action to a court.
Contract - answer A legally enforceable agreement between two or more parties.
Promisor - answer The party to a contract making a promise.
Promisee - answer The party to a contract to whom a promise is made.
,Privity of contract - answer The relationship that exists between 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.
Breach of contract - answer The failure, without legal excuse, to fulfill a contractual
promise.
Offeror - answer The party to a contract who promises to give something in return for
a promise or an act by another party
Offeree - answer The party to a contract who makes a promise or acts in return for
something offered by another party
Uniform Commercial Code - answer A code of federal laws that govern commercial
transactions in the United States.
Bilateral contract - answer A contract in which each party promises a performance.
Unilateral contract - answer A contract in which only one party makes a promise or
undertakes the requested performance.
Executed contract - answer A 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.
Express contract - answer A contract whose terms and intentions are explicitly
stated.
Implied contract - answer A contract whose terms and intentions are indicated by the
actions of the parties to the contract and the surrounding circumstances.
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.
, Void contract - answer An agreement that, despite the parties' intentions, never
reaches contract status and is therefore not legally enforceable or binding.
Offer - answer A promise that requires some action by the intended recipient to
make an agreement.
Counteroffer - answer A proposal an offeree makes to an offeror that varies in some
material way from the original offer, resulting in rejection of the original offer and
constituting a new offer.
Substantial performance - answer The performance of the primary, necessary terms
of an agreement.
Acceptance - answer The assent to an offer that occurs when the party to whom an
offer has been made either agrees to the proposal or does what has been proposed.
Forbearance - answer The act of giving up or the promise to give up a legal right.
Competent party - answer A party to a contract who has the basic or minimal ability
to do something and the mental ability to understand problems and make decisions.
Restitution - answer The return of specific property by court order.
Duress - answer The use of restraint, violence, threats of violence, or wrongful
pressure to compel a party to act contrary to his or her wishes or interests.
Consideration - answer Something of value or bargained for and exchanged by the
parties to a contract.
Accord and satisfaction - answer An agreement (accord) to substitute performance
other than that required in a contract and the carrying out of that agreement
(satisfaction).
Promissory estoppel - answer A legal principle that permits enforcement of a
promise made without consideration in order to prevent injustice.
Insurable interest - answer An interest in the subject of an insurance policy that is not
unduly remote and that would cause the interested party to suffer financial loss if an
insured event occurred.
Usury - answer The charging of an illegally high rate of interest on a loan.
Exculpatory clause (exculpatory agreement) - answer A contractual provision
purporting to excuse a party from liability resulting from negligence or an otherwise
wrongful act.
Answer
Doctrine of stare decisis - answer The principle that lower courts must follow
precedents set by higher courts.
Criminal law - answer The branch of the law that imposes penalties for wrongs
against society.
Civil law - answer A classification of law that applies to legal matters not governed by
criminal law and that protects rights and provides remedies for breaches of duties owed
to others.
Substantive law - answer A 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.
National Association of Insurance Commissioners (NAIC) - answer An association of
insurance commissioners from the 50 U.S. states, the District of Columbia, and the five
U.S. territories and possessions, whose purpose is to coordinate insurance regulation
activities among the various state insurance departments.
Diversity jurisdiction - answer The authority of federal district courts to hear cases
involving parties from different states that involve amounts in controversy over a legal
minimum.
Allegation - answer A claim made in the complaint by the plaintiff, specifying what
the plaintiff expects to prove to obtain a judgment against the defendant.
Complaint - answer The allegations made by a plaintiff in a lawsuit.
Pleading - answer A formal written statement of the facts and claims of each party to
a lawsuit
Motion - answer A formal request for the court to take a particular action
Discovery - answer A pretrial exchange of all relevant information between the
plaintiff and defendant.
Relevance - answer A quality of evidence that is likely to prove or disprove an
element of the case.
,General verdict - answer A kind of verdict that entails a complete finding and a single
conclusion by a jury on all issues presented.
Special verdict - answer A kind of verdict reached by a jury that makes findings of
fact by answering specific questions posed by the judge. The judge then applies the law
to the facts as the jury has found them.
Res judicata - answer A doctrine that bars parties to a lawsuit on which final
judgment has been rendered from bringing a second lawsuit on the same claim or on
related transactions.
Alternative dispute resolution (ADR) - answer Procedures to help settle disputes
without litigation, including arbitration, mediation, and negotiation.
Mediation - answer An alternative dispute resolution (ADR) method by which
disputing parties use a neutral outside party to examine the issues and develop a
mutually agreeable settlement.
Legislative rule - answer A type of substantive administrative agency rule that comes
from a statutory delegation of authority and that has the same force as a law enacted by
Congress or a legislature.
Interpretative rule - answer A type of administrative agency rule that interprets
statutes, providing guidance for agency staff or regulated parties, but that lacks the
force and effect of law and therefore is not binding on individuals.
Procedural rule - answer A type of administrative agency rule that prescribes
procedures for agency operations, legislative rulemaking, and adjudication proceedings.
Standing to sue - answer A party's right to sue, as one who has suffered or will suffer
a legal wrong or an adverse effect from an action.
Final order - answer An administrative agency's final conclusion or disposition of any
material private right of a party, terminating an agency proceeding.
Exhaustion of administrative remedies - answer The completion of all possible
administrative procedures and appeals in a case; required before a party can appeal an
agency action to a court.
Contract - answer A legally enforceable agreement between two or more parties.
Promisor - answer The party to a contract making a promise.
Promisee - answer The party to a contract to whom a promise is made.
,Privity of contract - answer The relationship that exists between 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.
Breach of contract - answer The failure, without legal excuse, to fulfill a contractual
promise.
Offeror - answer The party to a contract who promises to give something in return for
a promise or an act by another party
Offeree - answer The party to a contract who makes a promise or acts in return for
something offered by another party
Uniform Commercial Code - answer A code of federal laws that govern commercial
transactions in the United States.
Bilateral contract - answer A contract in which each party promises a performance.
Unilateral contract - answer A contract in which only one party makes a promise or
undertakes the requested performance.
Executed contract - answer A 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.
Express contract - answer A contract whose terms and intentions are explicitly
stated.
Implied contract - answer A contract whose terms and intentions are indicated by the
actions of the parties to the contract and the surrounding circumstances.
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.
, Void contract - answer An agreement that, despite the parties' intentions, never
reaches contract status and is therefore not legally enforceable or binding.
Offer - answer A promise that requires some action by the intended recipient to
make an agreement.
Counteroffer - answer A proposal an offeree makes to an offeror that varies in some
material way from the original offer, resulting in rejection of the original offer and
constituting a new offer.
Substantial performance - answer The performance of the primary, necessary terms
of an agreement.
Acceptance - answer The assent to an offer that occurs when the party to whom an
offer has been made either agrees to the proposal or does what has been proposed.
Forbearance - answer The act of giving up or the promise to give up a legal right.
Competent party - answer A party to a contract who has the basic or minimal ability
to do something and the mental ability to understand problems and make decisions.
Restitution - answer The return of specific property by court order.
Duress - answer The use of restraint, violence, threats of violence, or wrongful
pressure to compel a party to act contrary to his or her wishes or interests.
Consideration - answer Something of value or bargained for and exchanged by the
parties to a contract.
Accord and satisfaction - answer An agreement (accord) to substitute performance
other than that required in a contract and the carrying out of that agreement
(satisfaction).
Promissory estoppel - answer A legal principle that permits enforcement of a
promise made without consideration in order to prevent injustice.
Insurable interest - answer An interest in the subject of an insurance policy that is not
unduly remote and that would cause the interested party to suffer financial loss if an
insured event occurred.
Usury - answer The charging of an illegally high rate of interest on a loan.
Exculpatory clause (exculpatory agreement) - answer A contractual provision
purporting to excuse a party from liability resulting from negligence or an otherwise
wrongful act.
