C81 Part 1: Study 5

Question 1

Agreement

Answer 1

Where 2 or more persons come to a mutual understanding with respect to their rights & duties

Question 2

Void Contract

Answer 2

An illegal contract in the law, a contract that was never made or never existed. For example one cannot enter into a contract to commit an illegal act like theft and have it stand up in court. Such a contract is considered a void contract

Question 3

Consideration

Answer 3

The value recieved to bind a contract, is essential part of binding contract. Consideration is either expressed or implies. The money or whatever is being used in substitution, paid for the article or contract is the consideration

Question 4

Tutor (or curator)

Answer 4

Person who is the legsl guardian of another

Question 5

Capacity to contract

Answer 5

Parties must be legslly able to enter into contract. The person must be able to enter into a legal agreement and preform some act, must be sound mind.

Question 6

Lesion

Answer 6

Occurs when the minor cannot financially afford the object of the contract even though the price is fair, or when the minor can afford it but the object is overvalues or when the minor cannot afford it.
Challenge can only be raised by the minir; it is binding on the other party, who cannot cancel at his or her own discretion.

Question 7

Insured

Answer 7

Any persons covered by an insurance policy. in some policies it may be defined exgasgively to limit the coversge or defined broadly to expany coverage

Question 8

Bailee

Answer 8

In contract & property law, one to whom goods or property are entrusted for a stated purpose. Can be either gratuitous or for hire

Question 9

Dedicatable

Answer 9

An agreement specified amount that the insured must bay on a claim BEFORE the insurance company will cover the rest. It is agreed upon by the insurer and insured. Obligation to pay is not based on who is at fault

Question 10

Coinsurance Clause

Answer 10

A distinct section or provision in an insurance policy that requires an insured (property owner) to carry seperate insurance for a specifed amount stated in the policy to be eligible for full coverage. If there is insufficient coverage, the insured must pay part of the loss

Question 11

ACV (Actual Cash Value)

Answer 11

The fair market value of property, taking into account factors may augment or reduce the value of property

CALCULATED;
1) Cost to repair/replace less depreciation
2) Fair market value
OR
3) Consideration of all relevant evidence of the value of the damaged property

Question 12

Replacement Value

Answer 12

The current market value of the cost to replace the lost or damaged insured poperty

Question 13

Depreciation

Answer 13

The reduction in value of property through use, aging, deterioration or obselence

Question 14

Like, Kind & Quality

Answer 14

Refers to replacement of damaged, destroyed, or lost property with used property of similar type & condition

Question 15

Guaranteed replacement cost

Answer 15

An undertaking by the insurer to pay the cost of the repairs to or replace the dwelling building even if it is more than the amount of insurance on the dwelling building, provided certsin conditions are met in addition to those that normally govern replacement cost

Question 16

Salvage

Answer 16

Remaining value of property after severe damage by fire or other peril.
Overall loss is reduced by the salvage value. Undamaged property may be quite saleable some may need to be repaired

Question 17

Subrogation

Answer 17

Legal process by which an insurance company (after the payment of a loss) is assinged the right if the insured to recover the amount of the loss from thise who are legally liable for it

Question 18

Contribution

Answer 18

When more than one policy has been issued to insure a given risk, a loss must be divided equatabily among the various policies. According to their amounts & terms

Question 19

Excess Insurance

Answer 19

Insurance that does not participate until all other similsr inshrsnce on the same subject is exhausted or until loss exceeds a previous agreed upon amount

Question 20

Utmost god faith

Answer 20

A legal principal calling for the highest standards of integrity on the part of the insured & insurer

Question 21

Uberrimai Fidelity

Answer 21

Of the utmost good faith. The basis or all insurance & reinsurance contracts. Both parties to the contract are bound to excersize good faith (by full disclousure of all info)

Question 22

Good Faith

Answer 22

Most contracts have this. Insurance contracrs are agreemenrs made in the utmost good faith, Implies standard of honesty greater rhan that usually required in most ordinary commercial contracts

Question 23

Material Fact

Answer 23

A fact that would affect a contract of insurance enough to influence an insurer’s decision regarding wether to accept or reject the risk of thr premium to be set. Must be disclosed by the applicant if asked about

Question 24

Misinterpretations

Answer 24

Incorrect/missing information about a material fact that us offered, by an applicant kr insured with or without intent to mislead

Question 25

Non disclosure

Answer 25

Contrzct of insursnce us based upon utmost good faith. Applicant for inshrsncr is required to disclose to thr company all material facts that are necessary to underwrite a policy. If the applicant is guilty of non disclosure and may risk having coverage voided from deception

Question 26

Concealment

Answer 26

As appljed to insurance, the intention witholdingfrom an insurance company of information peritent to a risk

Question 27

Insurance Policy

Answer 27

A written contract of insurancr that provides evidence that a contract exists. it states in detail the terms of the agreement between insurer & insured

Question 28

Standard Forms

Answer 28

Any Insurance form worded identically by all insurance companies, to meet requirements of local lesignation

Question 29

Manuscript wording

Answer 29

Policy wording that does not confirm to the standard wording in general use within the insurance industry & that is unique to the policy involved

Question 30

Certificate of insurance

Answer 30

written document stating that insurance is in effect. includes general statement of policy’s coverage

Question 31

Renewal certificate

Answer 31

a short form certificate issued at renawl, refrerinf to the expiring policy & stating that its provisions, clauses & exceptions continue for another term

Question 32

Endorsement

Answer 32

And amendment added to a written document, particularly an agreement between parties, altering its provisions

Question 33

Statatory conditions

Answer 33

Special Precribed & standardized conditions that the provincial & territoerisl insurance acts require to be included in inshrance policies

Question 34

General Conditons

Answer 34

Conditions of a contract rhat wet the minimum performance requiremenrs for the contactor (include the rights & responsibilities of parties involved)

Question 35

Declarations

Answer 35

Statemenrs included in a policy that are agreed to by the insured & form the basis of the contract of insurance

Question 36

Policy Conditins

Answer 36

Providions that state the rights & duties if the insured or insurer

Question 37

Subscription Policy

Answer 37

A single policy covering a risk that is divided among a number of insurers; the policy is issued by the “lead” company & signed by all participanting companies

Question 38

Chattel

Answer 38

Any property other thsn freehold land & leasehold interests in land

Question 39

Pro Rata Cancelation

Answer 39

Cancelation ot an insurancr policy or a bomd with the return premium credit being the full propertion of premium for the unexpired term of the policy

Question 40

Short Term Cancelation

Answer 40

Cancellation by the insured of a policy before its natural expiration; insurer pays a return premium that is less than the propionate part that remains unearned

Question 41

Renewal Recipt

Answer 41

A certificate attestinf that an insurance policy has been extended for another term