AIC 301 Assignment 1, 2 and 3 (Understanding the Basics of
Contracts Applying the Insurance Contract How Property
and Commercial Law Applies to Claims) Questions With
Complete Solutions
A badly leaking bathtub in the apartment above Preethi's has not
been repaired by the landlord despite several requests. To waive
payment of rent, Preethi as tenant can do which one of the
following? Correct Answers She can vacate the premises if
repairs are not made.
She can vacate the premises if repairs are not made. When a
property has a significant defect, the tenant need not pay rent if
these three conditions have occurred sequentially: 1. The tenant
has demanded that the landlord correct the situation. 2. The
landlord has not correct the situation within a reasonable time. 3.
The tenant has left the premises at the end of that reasonable
time
A bilateral contract is Correct Answers A contract in which
each party promises a performance.
A bilateral contract is a contract in which each party promises a
performance. In contrast, a unilateral contract is one where only
one party makes a promise or undertakes the requested
performance.
A city announced that a celebrity was going to perform in the
park on a specific day. Kathy rented a park gazebo to be certain
that she and her son could see the celebrity. She was charged an
inflated price because this was a special event. The celebrity was
,injured in an auto accident before the event and had to cancel the
performance. Kathy's contract with the park for the gazebo
rental could possibly excuse Kathy's performance of the contract
because of Correct Answers Frustration of purpose.
The contract with the park was useless to Kathy since the
original purpose for the rental was frustrated because the
celebrity was not there.
A claim representative is working with Karl to settle a water
damage claim. The loss was extensive and Karl fears retaining
the wet property for inspection as required by his policy will
cause a mold problem. The claim representative informs Karl
that he does not need to retain the wet property. Is the action of
the claim representative appropriate? Correct Answers Yes,
because the claim representative may grant the insured a waiver
of rights from the contract.
A defense against conversion is the plaintiff's failure to Correct
Answers establish the right of possession of the property.
Common defenses against conversion claims are the
aforementioned plaintiff's failure to establish the right to
possession of the property and/or a plaintiff's refusal to demand
the property's return, followed by the defendant's consequent
refusal to deliver it. A bailee's defense can include that the
property wasn't in his or her possession because it was lost or
destroyed through no fault of the bailee (by an act of nature, for
example).
A gift requires which one of the following elements? Correct
Answers Delivery of a gift can be by actual physical transfer or
,by constructive delivery which is implied by law. A gift requires
three elements: donative intent, delivery, and acceptance.
A homeowners policy is an example of Correct Answers An
executory contract.
A mistake in a contract is a perception that does not agree with
the facts. While some mistakes do not affect the parties' rights,
others make the agreement voidable or Correct Answers
Unenforceable.
While some mistakes do not affect the parties rights, other make
the agreement voidable or unenforceable.
A municipality contracts with a large propane gas company to
provide sufficient fuel for the town's meat market. A citizen
became ill after eating meat that had spoiled when the gas
supply was interrupted. The citizen who became ill is best
described as Correct Answers An incidental beneficiary.
The citizen who became ill was an incidental beneficiary who
had no rights under the contract between the municipality and
the gas company. Any duty to the citizen is indirect.
A person who enters a contract under duress may not have
created Correct Answers Mutual assent.
A party who entered a contract under duress may not have
created mutual assent. (Mutual assent is the genuine assent of all
parties. Genuine assent is the contracting parties' actual assent to
form a contract or their indication of intent to contract by their
, actions and words.) The question is whether the wrongdoer
deprived the plaintiff of free will in entering the agreement.
A subpoena duces tecum is a subpoena to Correct Answers
compel production of documents or records.
ABC Corporation, which purchased insurance from XYZ
Insurance Company, materially breached the insurance contract.
Which one of the following is a right the insurer has against the
insured? Correct Answers Nonperformance
Nonperformance is a right the insurer has against the insured
when a material breach occurs. A party's material breach
excuses the other party's performance and immediately gives
rise to remedies for breach of contract. Repudiation is a party's
refusal to meet obligations under a contract. Substantial
performance is the performance of the primary, necessary terms
of an agreement. A tender is an offer to perform one's duties
under a contract.
Accession Correct Answers An increase or addition to
property.
Accord and satisfaction Correct Answers An agreement
(accord) to substitute performance other than that required in a
contract and the carrying out of that agreement (satisfaction).
Adverse possession Correct Answers The claim of ownership
of land by possession that is exclusive, open, hostile,
unpermitted, and continuous for a statutory period.
Contracts Applying the Insurance Contract How Property
and Commercial Law Applies to Claims) Questions With
Complete Solutions
A badly leaking bathtub in the apartment above Preethi's has not
been repaired by the landlord despite several requests. To waive
payment of rent, Preethi as tenant can do which one of the
following? Correct Answers She can vacate the premises if
repairs are not made.
She can vacate the premises if repairs are not made. When a
property has a significant defect, the tenant need not pay rent if
these three conditions have occurred sequentially: 1. The tenant
has demanded that the landlord correct the situation. 2. The
landlord has not correct the situation within a reasonable time. 3.
The tenant has left the premises at the end of that reasonable
time
A bilateral contract is Correct Answers A contract in which
each party promises a performance.
A bilateral contract is a contract in which each party promises a
performance. In contrast, a unilateral contract is one where only
one party makes a promise or undertakes the requested
performance.
A city announced that a celebrity was going to perform in the
park on a specific day. Kathy rented a park gazebo to be certain
that she and her son could see the celebrity. She was charged an
inflated price because this was a special event. The celebrity was
,injured in an auto accident before the event and had to cancel the
performance. Kathy's contract with the park for the gazebo
rental could possibly excuse Kathy's performance of the contract
because of Correct Answers Frustration of purpose.
The contract with the park was useless to Kathy since the
original purpose for the rental was frustrated because the
celebrity was not there.
A claim representative is working with Karl to settle a water
damage claim. The loss was extensive and Karl fears retaining
the wet property for inspection as required by his policy will
cause a mold problem. The claim representative informs Karl
that he does not need to retain the wet property. Is the action of
the claim representative appropriate? Correct Answers Yes,
because the claim representative may grant the insured a waiver
of rights from the contract.
A defense against conversion is the plaintiff's failure to Correct
Answers establish the right of possession of the property.
Common defenses against conversion claims are the
aforementioned plaintiff's failure to establish the right to
possession of the property and/or a plaintiff's refusal to demand
the property's return, followed by the defendant's consequent
refusal to deliver it. A bailee's defense can include that the
property wasn't in his or her possession because it was lost or
destroyed through no fault of the bailee (by an act of nature, for
example).
A gift requires which one of the following elements? Correct
Answers Delivery of a gift can be by actual physical transfer or
,by constructive delivery which is implied by law. A gift requires
three elements: donative intent, delivery, and acceptance.
A homeowners policy is an example of Correct Answers An
executory contract.
A mistake in a contract is a perception that does not agree with
the facts. While some mistakes do not affect the parties' rights,
others make the agreement voidable or Correct Answers
Unenforceable.
While some mistakes do not affect the parties rights, other make
the agreement voidable or unenforceable.
A municipality contracts with a large propane gas company to
provide sufficient fuel for the town's meat market. A citizen
became ill after eating meat that had spoiled when the gas
supply was interrupted. The citizen who became ill is best
described as Correct Answers An incidental beneficiary.
The citizen who became ill was an incidental beneficiary who
had no rights under the contract between the municipality and
the gas company. Any duty to the citizen is indirect.
A person who enters a contract under duress may not have
created Correct Answers Mutual assent.
A party who entered a contract under duress may not have
created mutual assent. (Mutual assent is the genuine assent of all
parties. Genuine assent is the contracting parties' actual assent to
form a contract or their indication of intent to contract by their
, actions and words.) The question is whether the wrongdoer
deprived the plaintiff of free will in entering the agreement.
A subpoena duces tecum is a subpoena to Correct Answers
compel production of documents or records.
ABC Corporation, which purchased insurance from XYZ
Insurance Company, materially breached the insurance contract.
Which one of the following is a right the insurer has against the
insured? Correct Answers Nonperformance
Nonperformance is a right the insurer has against the insured
when a material breach occurs. A party's material breach
excuses the other party's performance and immediately gives
rise to remedies for breach of contract. Repudiation is a party's
refusal to meet obligations under a contract. Substantial
performance is the performance of the primary, necessary terms
of an agreement. A tender is an offer to perform one's duties
under a contract.
Accession Correct Answers An increase or addition to
property.
Accord and satisfaction Correct Answers An agreement
(accord) to substitute performance other than that required in a
contract and the carrying out of that agreement (satisfaction).
Adverse possession Correct Answers The claim of ownership
of land by possession that is exclusive, open, hostile,
unpermitted, and continuous for a statutory period.
