CPCU 530 EXAM LATEST
Which one of the following best explains how a successful litigant enforces an arbitration
award?
Select one:
A. The winning party can take the arbitrator's award directly to a sheriff to mandate compliance
with the decision.
B. An arbitrator cannot award money, but the decision can be used as persuasive evidence in a
real court.
C. An arbitrator's award is filed with the appropriate court and is as enforceable as any court
judgment.
D. The parties participating in the arbitration agree in a contract to comply with the arbitrator's
decision.
C. An arbitrator's award is filed with the appropriate court and is as enforceable as any court
judgment.
Jessica operates her architectural business out of her home. She obtains her business and
personal insurance through Glaston Insurance Agency (GIA). Daniel, the agent at GIA, neglected
to tell Jessica that professional liability coverage was excluded when she purchased the
coverage for her business. When the deck on her house collapses, Lily files a suit against
Jessica's architectural business. It is soon discovered that Jessica's coverage from GIA does not
include professional liability coverage, and that Jessica does not have adequate funds to
compensate Lily. Lily decides to file a suit against Daniel. Which one of the following statements
is correct regarding Lily's right to sue Daniel?
Select one:
,A. Because the circumstances involve professional liability exposures, most courts will interpret
that Lily, as a third party, has the right to sue Daniel.
B. Lily, as a third party, has the right to sue Daniel for his failure to transmit information
properly.
C. Lily was not a party to the Daniel and Jessica's producer-customer relationship, and therefore
has no rights under the contract.
D. As a third party, the only way that Lily can sue Daniel is by filing a joint suit with Jessica.
C. Lily was not a party to the Daniel and Jessica's producer-customer relationship, and therefore
has no rights under the contract.
The Jet Hotel had an old, dangerous boiler in the basement that was rarely used. The
Occupational Health and Safety Administration (OSHA) had no safety standards for this
particular boiler, but did have standards for similar pieces of equipment. The Jet Hotel's
management took no steps to make the boiler safe. One day, the boiler exploded. No one was
seriously hurt, but nine employees were treated with first aid. The management did not record
these injuries or report the accident to OSHA. Which one of the following OSHA requirements
or standards has the management violated?
Select one:
A. The general duty clause
B. The reporting requirement
C. The recordkeeping requirement
D. The specific safety standard for boilers
A. The general duty clause
,Which one of the following is a necessary element for a document to be considered a title
under Uniform Commercial Code (UCC) Article 7?
Select one:
A. The document gives the holder the right to receive, hold, and dispose of both the goods and
the document of title itself.
B. The document is a contract to ship, store, or dispose of goods.
C. The document is negotiable.
D. The document is created by the bailee as a receipt for goods received.
D. The document is created by the bailee as a receipt for goods received.
Justine contracted to create Charlotte's wedding gown by next June. Later, Justine and Charlotte
agreed that Tammy would make the gown, and Charlotte expressly released Justine from the
original contract. Which one of the following statements is true?
Select one:
A. There was a discharge by performance.
B. There was a personal satisfaction contract.
C. There was an agreement to rescind.
D. There was substantial performance of a contract.
C. There was an agreement to rescind.
, Ralph is the director of a fraternal organization that is a not-for-profit association. Ralph
volunteers his time to manage the organization, and he is not paid a salary nor does he receive
any type of non-monetary compensation. Which one of the following statements regarding
Ralph's role as director of the fraternal association is true?
Select one:
A. Since Ralph receives no compensation, his standard of care owed to the association is less
than that of a compensated corporate director.
B. Ralph, as a member of the fraternal association, has no property rights in the association's
assets.
C. As an association director, Ralph has legal rights and duties that differ from those of a
corporate director.
D. Ralph cannot be sued by a member of the association but the fraternal association itself may
be sued by a member who has suffered damage.
A. Since Ralph receives no compensation, his standard of care owed to the association is less
than that of a compensated corporate director.
To perfect a security interest in a negotiable instrument, one should
Select one:
A. Take actual possession of the instrument.
B. Create a document of constructive notice.
C. Negotiate a termination statement with the debtor.
D. File a finance statement in the proper county office.
Which one of the following best explains how a successful litigant enforces an arbitration
award?
Select one:
A. The winning party can take the arbitrator's award directly to a sheriff to mandate compliance
with the decision.
B. An arbitrator cannot award money, but the decision can be used as persuasive evidence in a
real court.
C. An arbitrator's award is filed with the appropriate court and is as enforceable as any court
judgment.
D. The parties participating in the arbitration agree in a contract to comply with the arbitrator's
decision.
C. An arbitrator's award is filed with the appropriate court and is as enforceable as any court
judgment.
Jessica operates her architectural business out of her home. She obtains her business and
personal insurance through Glaston Insurance Agency (GIA). Daniel, the agent at GIA, neglected
to tell Jessica that professional liability coverage was excluded when she purchased the
coverage for her business. When the deck on her house collapses, Lily files a suit against
Jessica's architectural business. It is soon discovered that Jessica's coverage from GIA does not
include professional liability coverage, and that Jessica does not have adequate funds to
compensate Lily. Lily decides to file a suit against Daniel. Which one of the following statements
is correct regarding Lily's right to sue Daniel?
Select one:
,A. Because the circumstances involve professional liability exposures, most courts will interpret
that Lily, as a third party, has the right to sue Daniel.
B. Lily, as a third party, has the right to sue Daniel for his failure to transmit information
properly.
C. Lily was not a party to the Daniel and Jessica's producer-customer relationship, and therefore
has no rights under the contract.
D. As a third party, the only way that Lily can sue Daniel is by filing a joint suit with Jessica.
C. Lily was not a party to the Daniel and Jessica's producer-customer relationship, and therefore
has no rights under the contract.
The Jet Hotel had an old, dangerous boiler in the basement that was rarely used. The
Occupational Health and Safety Administration (OSHA) had no safety standards for this
particular boiler, but did have standards for similar pieces of equipment. The Jet Hotel's
management took no steps to make the boiler safe. One day, the boiler exploded. No one was
seriously hurt, but nine employees were treated with first aid. The management did not record
these injuries or report the accident to OSHA. Which one of the following OSHA requirements
or standards has the management violated?
Select one:
A. The general duty clause
B. The reporting requirement
C. The recordkeeping requirement
D. The specific safety standard for boilers
A. The general duty clause
,Which one of the following is a necessary element for a document to be considered a title
under Uniform Commercial Code (UCC) Article 7?
Select one:
A. The document gives the holder the right to receive, hold, and dispose of both the goods and
the document of title itself.
B. The document is a contract to ship, store, or dispose of goods.
C. The document is negotiable.
D. The document is created by the bailee as a receipt for goods received.
D. The document is created by the bailee as a receipt for goods received.
Justine contracted to create Charlotte's wedding gown by next June. Later, Justine and Charlotte
agreed that Tammy would make the gown, and Charlotte expressly released Justine from the
original contract. Which one of the following statements is true?
Select one:
A. There was a discharge by performance.
B. There was a personal satisfaction contract.
C. There was an agreement to rescind.
D. There was substantial performance of a contract.
C. There was an agreement to rescind.
, Ralph is the director of a fraternal organization that is a not-for-profit association. Ralph
volunteers his time to manage the organization, and he is not paid a salary nor does he receive
any type of non-monetary compensation. Which one of the following statements regarding
Ralph's role as director of the fraternal association is true?
Select one:
A. Since Ralph receives no compensation, his standard of care owed to the association is less
than that of a compensated corporate director.
B. Ralph, as a member of the fraternal association, has no property rights in the association's
assets.
C. As an association director, Ralph has legal rights and duties that differ from those of a
corporate director.
D. Ralph cannot be sued by a member of the association but the fraternal association itself may
be sued by a member who has suffered damage.
A. Since Ralph receives no compensation, his standard of care owed to the association is less
than that of a compensated corporate director.
To perfect a security interest in a negotiable instrument, one should
Select one:
A. Take actual possession of the instrument.
B. Create a document of constructive notice.
C. Negotiate a termination statement with the debtor.
D. File a finance statement in the proper county office.
