Flashcards in Contracts Deck (20)
Elements of a legal contract
an offer, acceptance and consideration
The amount paid at the inception of an insurance contract
An offeree who wants to accept an offer must:
Abide by any stipulations in the offer & accept every term of the offer.
Something of value that both parties give to form the contract. ie: a contract for sale and purchase of property involves: a sum of money (consideration extended to buyer) IN EXCHANGE FOR the property (consideration extended by the seller)
To be considered legally competent, a person must be:
mentally sound, not under the influence and of legal age.
Insurance contract characteristics:
Contracts of adhesion, aleatory, personal, unilateral and conditional.
A contract drafted by one party and is offered on a "take it or leave it" basis. The other party has little chance to bargain terms or price.
Contracts of Adhesion
Contracts that involve an exchange of unequal amounts, specifically unequal transfer of value between the parties.
When only one party makes an enforceable promise. Only the insurer makes a promise that can be enforced.
Contact where the force and effect and often it's continuation, depend on certain actions of the policyholder.
The insured's recovery under an indemnity policy cannot be larger than either the actual loss sustained or the amount of insurance.
The insurer agrees to pay a specified amount of money when event occurs regardless of value. ie: life insurence.
Property insurance provision that suspends the coinsurance clause until a specified expiration date. Previously referred to as an agreed amount clause
The insured relies on the insurance company to fulfill its promises. The insurance company also expects that the insured will not misrepresent the facts or conceal information when applying for insurance or presenting a claim.
Uberrimae Fidae OR Utmost Good Faith
A statement made at time contact was formed. Statement persuades a party to enter into the contract.
Info that would affect an insurer's underwritting or claim settlement decision.
Deliberate withholding of material facts. ie: auto applicant does not disclose frequent seizures.
Guarantees that something is true and always will remain true. ie: jewelry store owner stating that a alarm will always be in use. Otherwise claim may not be paid.
When a party cannot enforce a right that it has voluntarily waived by it's past conduct. Not able to deny claim for late payment if accepted late payments in the past.