Study 2 Flashcards
(30 cards)
What are the two main systems of civil law in Canada?
Common law (used in provinces and territories outside Quebec) and the Civil Code of Québec.
What is common law?
A legal system developed in England based on court decisions (precedent) and case law.
What is statute law?
Written law passed by a legislative body such as Parliament or provincial legislatures.
What is the Civil Code of Québec?
A codified legal system used exclusively in Quebec, based on the Napoleonic Code.
What does the doctrine of contra proferentem state?
Ambiguities in a contract are interpreted against the party that drafted the contract.
What case affirmed the contra proferentem principle in Canada?
Consolidated-Bathurst v. Mutual Boiler (1980).
What is relief from forfeiture?
A legal remedy where courts excuse an insured from strict compliance with policy conditions if enforcing them would be unjust.
What was the significance of Marche v. Halifax Insurance Co. (2005)?
It showed courts may relieve an insured from forfeiture if a breach (like vacancy) was later rectified.
What are statutory conditions?
Mandatory conditions that apply to fire insurance policies in common law provinces and territories.
Can statutory conditions be changed?
Only if the changes benefit the insured; otherwise, they remain binding.
What is material fact?
A fact that would influence the insurer’s decision to accept the risk or set premiums.
What happens if a material fact is misrepresented?
The insurer may void the policy ab initio and deny the claim.
What does ‘ab initio’ mean?
From the beginning; the policy is treated as though it never existed.
What does ‘privity of contract’ mean?
Only parties to a contract have rights and obligations under it.
When can a change of interest be automatically covered?
In cases of succession, operation of law, bankruptcy, or death of the insured.
What is a material change?
A significant change during the policy term that affects the risk.
What happens if a material change is not reported?
The insurer may deny the claim or void the affected portion of the policy.
What is short-rate cancellation?
When the insured cancels midterm and receives a refund less an administrative charge.
What is minimum retained premium?
The minimum amount the insurer retains when a policy is cancelled.
How must the insurer cancel a policy?
In writing, with notice delivered personally, by registered mail, or by courier.
What is a proof of loss?
A formal statement detailing the loss, required to support a claim.
What is subrogation?
The insurer’s right to recover from third parties after paying a claim.
What does the statutory condition on fraud state?
A fraudulent claim invalidates the entire claim.
Can an innocent coinsured still receive coverage?
Yes, if unaware of the fraud and not involved in it.
