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Chapter 2: Law of Contracts and Other Contract Features
Contracts
13
Insurance
Professional
02/11/2012

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Cards

Term
According to the law of contracts, elements that must be present in order for any contract to be legal and enforceable in a court of law include:
Definition
1.) Offer and Acceptance
2.) Consideration
3.) Competent Parties
4.) Legal Purpose
Term
Distinct characteristics of an insurance contract include the following 6 charateristics:
Definition
1.) Unilateral
2.) Adhesion
3.) Aleatory
4.) Conditional
5.) Personal
6.) Utmost Good Faith
Term
What is Unilateral, in contract law?
Definition
Insurance policy is unilateral since it's language is developed by one party.
Term
What is Adhesion, in contract law?
Definition
Contract language is drawn up by one party (Insurance company) and other side agrees to terms.
Term
What is Aleatory, in contract law?
Definition
Contract in which one party may recover more in value than he or she has parted with based upon a possible future event.
Term
Definition of Representations
Definition
Oral or written statements made by an applicant for insurance that are recorded on the application.
Term
Definition of Misrepresentations
Definition
False Statement made by an applicant.
Term
Definition of Material Misrepresentation
Definition
Material fact that, had it been known by the insurer at the time of application, would have caused the insurer to reject the application. Material Misrepresentation can cause a policy to become void.
Term
Definition of Warranty
Definition
A representation made by the applicant/insured that is guaranteed to be absolutely true.
Term
Definition of Concealment
Definition
The failure to disclose material facts is considered to be concealment.
Term
Definition of Fraud
Definition
Deliberate knowledge of or intentional deceit with the objective of making false statements.
Term
Definition of Waiver
Definition
Voluntary surrendering of a known right. Also, defined as "the deliberate, voluntary or intentional abandonment of a known right by the insurer."
Term
Definition of Estoppel
Definition
Legal principle involving a broken promise. It prohibits an insurer from denying a claim due to specific actions by the insurer or it's representatives or due to inaction by the insurer.
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