AIC 301 – FINAL EXAM QUESTIONS
AND ANSWERS 2026 VERIFIED.
The act of leaving a dangerous article such as a gun or car with a person who the lender knows,
or should know, is likely to use it in an unreasonably risky manner is known as
Select one:
A. Negligent entrustment.
B. Contributory negligence.
C. Negligent supervision.
D. The dangerous instrumentality doctrine. - ANS A. Negligent entrustment.
There was a large unmarked sinkhole on Charlotte's property, a short distance from a public
road. One evening, a police officer chased a mugger off the road and onto Charlotte's property.
Both the officer and the mugger fell into the hole and were injured. Which one of the following
best answers whether Charlotte is liable for the injuries to the police officer and/or to the
mugger?
Select one:
A. Charlotte is not liable to either the officer or the mugger, because occupiers of land have no
duty to correct defects abutting sidewalks or streets.
B. Charlotte is liable to both the officer and the mugger, because she had a duty to avoid
endangering travelers with an unguarded ditch.
C. Charlotte is not liable to the officer or the mugger, because they were both trespassers on her
property.
D. Charlotte is liable to the officer for the unguarded ditch, because the officer was a licensee,
but she is not liable to the tres - ANS D. Charlotte is liable to the officer for the unguarded
ditch, because the officer was a licensee, but she is not liable to the trespassing mugger.
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,Antonia was a life tenant who occupied a house at 33 Main Street. Emil had a remainder
interest in the property and planned to occupy it after Antonia's death. Antonia obtained
property insurance covering the house, through Richley Insurance Co. The house was destroyed
by fire during Antonia's life estate. Richley must pay the insurance policy proceeds to
Select one:
A. Emil, under the doctrine of equitable conversion.
B. Antonia, since she occupied the house at the time of the fire.
C. Antonia, because life tenants can recover the entire value of the property that they insure.
D. Emil, because he will ultimately own the property. - ANS C. Antonia, because life tenants
can recover the entire value of the property that they insure.
Cristobal is in the process of purchasing a home from Leah. They are in the executory period.
This means that
Select one:
A. Cristobal and Leah have signed the real estate sales contract, but have not yet closed.
B. Cristobal has made an offer and Leah has accepted verbally.
C. Cristobal and Leah have signed the real estate sales contract and have gone to closing.
D. Cristobal has made a verbal offer, which Leah is considering. - ANS A. Cristobal and Leah
have signed the real estate sales contract, but have not yet closed.
Kirk contracts with Ernest for five shipments of fresh produce at a specific price per shipment
due at the time of delivery. Kirk fails to ship the third shipment. The contract between Kirk and
Ernest is
Select one:
A. Void.
B. Unilateral.
C. Divisible.
D. Entire. - ANS C. Divisible. A contract is divisible if each party's performance can be divided
into two or more parts and if it appears that the parties to the contract contemplated separate
compensation for each installment of the performance. Failure to perform one installment is
not failure to perform the entire agreement. If the contract is divided into parts only to provide
periodic payments toward the full amount due upon contract completion, the contract is an
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, entire contract, not a divisible one. When possible, courts prefer to interpret contracts as
divisible to avoid hardships that can result from delaying payments under the contract until full
performance has been completed.
Fatima owns a cafe that is open to the public. Kaito enters the cafe and orders a coffee. Kaito is
a(n)
Select one:
A. Public invitee.
B. Business invitee.
C. Express licensee.
D. Trespasser. - ANS B. Business invitee.
James wants to pursue a legal claim against his neighbor, but he does not know what kind of
dispute resolution procedure is the best choice for his situation. The dispute is over a relatively
small amount of money, so James does not want to spend a lot in pursuit of his claim. James
wants to be able to present his side of the story and his witnesses before a neutral third party.
James would be pleased if he and his neighbor could reach a compromise, but, ideally, James
wants to be able to walk away with a binding decision. Assuming that James' neighbor will agree
to participate in whatever procedure James suggests, which one of the following dispute
resolution procedures is the best choice for James?
Select one:
A. Mediation
B. Negotiation
C. Arbitration
D. Litigation - ANS C. Arbitration
Chloe is investigating Thomas' claim for damage to his automobile. Thomas is not cooperating
with Chloe's attempts to schedule an adjuster to inspect the vehicle. Chloe should
Select one:
A. Issue a unilateral waiver of rights letter.
B. Issue a unilateral reservation of rights letter.
C. Issue denial for failure to cooperate.
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AND ANSWERS 2026 VERIFIED.
The act of leaving a dangerous article such as a gun or car with a person who the lender knows,
or should know, is likely to use it in an unreasonably risky manner is known as
Select one:
A. Negligent entrustment.
B. Contributory negligence.
C. Negligent supervision.
D. The dangerous instrumentality doctrine. - ANS A. Negligent entrustment.
There was a large unmarked sinkhole on Charlotte's property, a short distance from a public
road. One evening, a police officer chased a mugger off the road and onto Charlotte's property.
Both the officer and the mugger fell into the hole and were injured. Which one of the following
best answers whether Charlotte is liable for the injuries to the police officer and/or to the
mugger?
Select one:
A. Charlotte is not liable to either the officer or the mugger, because occupiers of land have no
duty to correct defects abutting sidewalks or streets.
B. Charlotte is liable to both the officer and the mugger, because she had a duty to avoid
endangering travelers with an unguarded ditch.
C. Charlotte is not liable to the officer or the mugger, because they were both trespassers on her
property.
D. Charlotte is liable to the officer for the unguarded ditch, because the officer was a licensee,
but she is not liable to the tres - ANS D. Charlotte is liable to the officer for the unguarded
ditch, because the officer was a licensee, but she is not liable to the trespassing mugger.
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,Antonia was a life tenant who occupied a house at 33 Main Street. Emil had a remainder
interest in the property and planned to occupy it after Antonia's death. Antonia obtained
property insurance covering the house, through Richley Insurance Co. The house was destroyed
by fire during Antonia's life estate. Richley must pay the insurance policy proceeds to
Select one:
A. Emil, under the doctrine of equitable conversion.
B. Antonia, since she occupied the house at the time of the fire.
C. Antonia, because life tenants can recover the entire value of the property that they insure.
D. Emil, because he will ultimately own the property. - ANS C. Antonia, because life tenants
can recover the entire value of the property that they insure.
Cristobal is in the process of purchasing a home from Leah. They are in the executory period.
This means that
Select one:
A. Cristobal and Leah have signed the real estate sales contract, but have not yet closed.
B. Cristobal has made an offer and Leah has accepted verbally.
C. Cristobal and Leah have signed the real estate sales contract and have gone to closing.
D. Cristobal has made a verbal offer, which Leah is considering. - ANS A. Cristobal and Leah
have signed the real estate sales contract, but have not yet closed.
Kirk contracts with Ernest for five shipments of fresh produce at a specific price per shipment
due at the time of delivery. Kirk fails to ship the third shipment. The contract between Kirk and
Ernest is
Select one:
A. Void.
B. Unilateral.
C. Divisible.
D. Entire. - ANS C. Divisible. A contract is divisible if each party's performance can be divided
into two or more parts and if it appears that the parties to the contract contemplated separate
compensation for each installment of the performance. Failure to perform one installment is
not failure to perform the entire agreement. If the contract is divided into parts only to provide
periodic payments toward the full amount due upon contract completion, the contract is an
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, entire contract, not a divisible one. When possible, courts prefer to interpret contracts as
divisible to avoid hardships that can result from delaying payments under the contract until full
performance has been completed.
Fatima owns a cafe that is open to the public. Kaito enters the cafe and orders a coffee. Kaito is
a(n)
Select one:
A. Public invitee.
B. Business invitee.
C. Express licensee.
D. Trespasser. - ANS B. Business invitee.
James wants to pursue a legal claim against his neighbor, but he does not know what kind of
dispute resolution procedure is the best choice for his situation. The dispute is over a relatively
small amount of money, so James does not want to spend a lot in pursuit of his claim. James
wants to be able to present his side of the story and his witnesses before a neutral third party.
James would be pleased if he and his neighbor could reach a compromise, but, ideally, James
wants to be able to walk away with a binding decision. Assuming that James' neighbor will agree
to participate in whatever procedure James suggests, which one of the following dispute
resolution procedures is the best choice for James?
Select one:
A. Mediation
B. Negotiation
C. Arbitration
D. Litigation - ANS C. Arbitration
Chloe is investigating Thomas' claim for damage to his automobile. Thomas is not cooperating
with Chloe's attempts to schedule an adjuster to inspect the vehicle. Chloe should
Select one:
A. Issue a unilateral waiver of rights letter.
B. Issue a unilateral reservation of rights letter.
C. Issue denial for failure to cooperate.
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