2015-2016 Deck Flashcards
What three things are the Ratio Decidendi based on:
a) the material facts
b) the decision of the judge
c) the reason for the decisions
What does the principle of Obiter Dicta translate as:
things said by the way
Is the obita dicta legally binding
no - it can be persuasive for future cases
Is the Supreme Court bound by its own decisions?
No
What is it called when the Government chose not only to consolidate current legislation on a particular topic but to include also principles embodied in case law. As a result most include existing statue and case law is reduced to a single code?
a codifying act
What are the four examples of a Codifying Act:
a) the Bills of Exchange Act 1882
b) the Partnership Act 1890
c) the Sale of Goods Act 1979
d) the Marine Insurance Act 1906
What is it called when an act is one which repeals all previous legislation on a subject and re-enacts it in one logically arranged statute? No new law is created but existing statutory enactments are brought under one ‘umbrella’
Consolidating Acts
What two examples are given for Consolidating Acts?
a) The Road Traffic Act 1988
b) The European Parliament and Council Directive
What are Enabling Acts (or Parents Acts) and rules under the Authorities known as?
Delegated or subordinate legislation
As parliament doesn’t have time to lay down all intricate rules and often law down general framework of rules- what is the term given to persons of power to make detailed rules and regulations for the purpose of implementing the act?
Delegated legislation
What are the three most important forms of delegated legislation?
a) statutory instruments
b) orders in council
c) bye - laws
What is the terms for legislation with affects acts done or right acquired before it came into effect?
Retroactive or retrospective legislation
What case is generally regarded as a separate form of nuisance? and an example of strict liability- that is, liability that can arise even where there is no fault or negligence?
Rylands v Fletcher (1868)
Which case is this:
The defendant employment independent contractors to construct a reservoir on his land to supply water to his mill. In the course of construction, the contracts came across some disused mine shafts filled with earth. After the work was completed one of the shafts gave way and water burst through and flooded the claimant’s colliery. It was found as a fact that the defendant had not been negligent
Rylands v Fletcher (1868)
For which tort is the claimant never required to prove that he has suffered loss or damage? A. Negligence. B. Nuisance. C. Slander. D. Trespass to land
D. Trespass to land
The general purpose of the law of torts is to protect people’s right by allowing them to sue- why?
If their interests are invaded, threatened or harmed
Which form of tort is actionable per se? Where you don’t have to prove you have suffered loss or damage
Tresspass
What does the following characteristic refer to under tort Trespass:
There is no liability unless the injury or harm is caused directly
The act of the defendant must be direct
What three forms does trespass take?
Trespass to the person
Trespass to goods
Trespass to land
What three forms does trespass to the person take?
Assault
Battery
False Imprisonment
Under trespass to goods tort- if the defendant deliberately deals with the goods in a way which is inconsistent with the right or a person who owns them what can they be sued for?
Conversion = stealing goods or selling borrowed goods
What three forms does trespass to land take?
Unlawful entry onto the land of another
Unlawfully remaining on the land of another
Unlawfully placing or throwing any material object upon the land or another (rubbish)
For the act of negligence to succeed, what are the three essentials?
- a duty of care owed by the defendant to the claimant
- a breach of that duty by the defendant (negligence); and
- damage suffered by the claimant as a result of the negligent act
What is the famous case that established the tort of negligence- duty of care?
Donoghue v Stevenson (1932)
How could Ms Donoghue sue the manufacturers of the ginger beer for negligence?
Because they owed her a duty of care
What term does this relate to: the law attempts to place a reasonable limit on the defendant’s responsibilities by releasing them for the damage is too remote
Causation and remoteness of damage
What case established a new test based on forseesability: damage would be too remote if it was of a type which was not reasonably foreseeable
Overseas Tankship (uk) Ltd v Mort’s Dock and Engineering co Ltd (1961)
What act is this referring to:
Eventually a strict liability for defective products was introduced under this act
Consumer Protection Act 1987
What are the five formations of a contract:
- Agreement
- Intention to create legal relations
- Consideration
- agreement must be in the form required by law
- the parties must have capacity to contract
what three ways can terms be implied with?
- in fact
- by custom or usage
- by law
What terms are based on the words spoken by the parties or written down by them?
Express terms
An insurance broker grants cover for motor insurance to a 21-year-old proposer. However, the
broker’s authority is restricted to only granting cover to drivers aged 23 years and over. What is the
basis on which the insurer is bound to cover the 21-year-old, if at all?
A. Agency by estoppel.
B. Apparent authority.
C. Implied actual authority.
D. The insurer is not bound.
B. Apparent authority.
What is an agent called that has never been appointed?
Agency by estoppel
What term is given for a person who may ‘hold out’ another person as being their agent when the latter has no authority at all, when the third party is deceived?
Agency by estoppel
What term is this referred to:
When a third party deals with an agent, often they will not know the exact limit of the agent’s authority. They are therefore bound to rely on what appears to be the authority of the agent
Apparent authority
What is this referring to:
A principal is bound, not only by acts which are within the actual authority of the agent, but by acts which are within the authority they appear to have
Apparent authority
What three areas can apparent authority arise in cases?
- the principal has restricted the authority of a validly appointed agent;
- the apparent agent has never been appointed at all
- unknown to third party the authority of the agent has been terminated
When does apparent authority only arise?
when the principal give the agent the appearance of the authority
What two forms can actual authority take?
Express actual authority
Implied actual authority
What does express authority arise from?
From the instructions which have been given to the agent. stating what is required and what is allowed
In express actual authority what two ways can instructions be given as part of the agency agreement
Oral and in writing
If an agent has to incur travel expenses or post and telephone charges what does this refer to?
a)A. Agency by estoppel.
B. Apparent authority.
C. Implied actual authority.
D. The insurer is not bound.
Implied actual authority
Where the agency has been created by express agreement the agent will have what two things?
express actual authority
implied actual authority
Whilst Tim was on holiday, unknown to him his agent made a contract on his behalf. Tim is happy
to ratify the contract but he does want to change a minor term. The services under the contract are
scheduled to be carried out next week. What is the correct position?
A. Tim cannot ratify the contract as it was made without his knowledge.
B. Tim cannot ratify the contract excluding the minor term as the whole contract must be ratified.
C. Tim can ratify the contract and change the term as it is only a minor term.
D. Tim can ratify the contract and change the minor term if this is done within reasonable time.
B. Tim cannot ratify the contract excluding the minor term as the whole contract must be ratified.
What is an disclosed principal?
A disclosed principal is one whose existence is known to the third party at the time the contract is made
What is the general rule when an authorised agent contracts on behalf of a disclosed principal?
They ‘drop out’ when the contract is made
For a disclosed principal- the third party can enforce the contract against each other but the agent can neither nor be sued on it- what are the three exceptions to this rule?
1- agent who sign a deed may be liable on it
- trade custom sometimes make the agent personally liable.
- agents who sign their name on a negotiable instrument may be liable
Can the undisclosed principal enforce the contract?
Yes
What is an undisclosed principal?
Where the third party is unaware that they are dealing with an agent
Alice acted as an agent for Ted in a house clearance sale and has successfully claimed commission
by implied agreement. What does this indicate about the commission amount?
A. It was agreed as it was based on a verbal agreement.
B. It was agreed as it was detailed in an agency contract.
C. It was not agreed, but Alice had a lien on Ted’s property.
D. It was not agreed, but Alice’s work was in her usual line of business for which she would
normally be paid.
D. It was not agreed, but Alice’s work was in her usual line of business for which she would
normally be paid.
If there is express or implied agreement what must the principal reward the agent with?
usually commission/ payments etc but they must have earned it
The principle of utmost good faith places the most legal duties on a proposer when he is
A. placing insurance cover directly without the assistance of a broker.
B. purchasing commercial insurance cover.
C. purchasing consumer insurance cover.
D. resident outside the UK
B. purchasing commercial insurance cover.
What does the term utmost good faith mean
the insurer and the insured have a duty to deal honestly and openly during their contractual relationship
When effecting a household contents insurance policy, the proposer deliberately provided the
insurer with misleading information and so the insurer avoided the policy. The insurer is only
obliged to return the premium to the policyholder in such circumstances if
A. the premium exceeds a de minimis amount.
B. the premium was paid in monthly instalments.
C. the premium was paid on day one of the policy period.
D. retaining the premium would be unfair to the policyholder.
D. retaining the premium would be unfair to the policyholder.
Under the 2012 Act, Consumer Insurance the insurer can only seek remedy if misrepresentation is qualifying- that is if:
1- the misrepresentation was caused by the consumer’s failure to exercise reasonable care
2. the insurer shows that without the misrepresentation, it would not have entered into the contract
Under the 2012 Act, Consumer Insurance classes misrepresentation as either:
1 - Deliberate or reckless
2. careless
Under the 2012 Act, Consumer Insurance if a misrepresentation was deemed deliberate or reckless what can be done:
The insurer can avoid the contract and not return any premiums paid unless it would be fair on the consumer to retain them
Under the 2012 Act, Consumer Insurance if a misrepresentation was deemed careless what three things can Insurers do:
1- if they wouldn’t have entered into the contract they can avoid the contract and refuse all claims but must return the premium paid
2. if they would have done it but on different terms, the contract is to be treated as if it had been entered on those terms
3. if they would’ve done it but charged a higher premium, the can reduced the proportion of the claim by:
Premium charged / Higher premium x 100
To what extent, if at all, does the duty of good faith apply to employers’ liability insurance? A. It applies in exactly the same way as it does to all other non-consumer insurances. B. It does not apply as it is a compulsory class of insurance. C. It only applies at inception of the policy but not at subsequent renewal. D. It only applies to large companies, defined as those with more than 50 employees.
A. It applies in exactly the same way as it does to all other non-consumer insurances.
Under English Law, the right to insure the life of another person arises if there is
A. the consent of the Law Commission.
B. the consent of the life assured.
C. a financial relationship recognised at law.
D. a relationship characterised by a close bond of natural affection.
C. a financial relationship recognised at law.
What are the four key elements of insurable interest?
1- there must be a subject matter of insurance
- the policyholder must have an economic of financial interest in the subject matter
- the interest must be a current interest- not expectancy
- the interest must be a legal interest
The Consumer Insurance (Disclosure and Representations) Act 2012 abolished the duty of
disclosure in consumer insurance with the result that a consumer’s duty is to take reasonable care
NOT to make a
A. fraudulent statement.
B. misrepresentation.
C. qualifying disclosure.
D. representation.
B. misrepresentation.
What can happen if there is a breach of warranty?
the injured party has a right to claim damages but not to terminate the contract
What can happen if there is a breach to the condition of the contract?
victim has right not only to claim damages but also to terminate the agreement
What class of insurance are implied warranties found in?
Marine Insurance only
When an insured breaches a suspensive condition, for how long, if at all, is policy cover invalid?
A. Cover remains valid, but the insurer is entitled to damages.
B. Cover is invalid until the insured describes the risk to the satisfaction of insurers.
C. Cover is invalid only for the period that the insured does not comply with the condition.
D. Cover is permanently invalid as the policy is terminated from the date of the breach.
C. Cover is invalid only for the period that the insured does not comply with the condition.
A joint policy is ‘indivisible’ what does this mean?
a breach by one insured may cause the whole policy to fail.
What happens if there is a breach in a composite policy?
If one of the insured breaches then the composite policy may invalidate their own cover without affecting the right of other insured persons to claim
In the case of lessor and less or mortgagor and mortgagee what sort of policy is this likely to be?
A composite policy
Where the insureds interests are different in a property- what kind of policy is this?
Composite
A warranty in a builder’s public liability insurance policy states that no work should be carried out at
a height greater than 10 metres. What will happen if the insurer discovers that the insured has
failed to comply with this warranty?
A. An additional premium will be charged.
B. All policy cover will be terminated from the date of breach.
C. A mid-term exclusion will be applied.
D. Settlement of any claims will be reduced on the basis of contributory negligence.
B. All policy cover will be terminated from the date of breach.
What liability does insurers have under an insurance contract for any loss that happens after being breached but before the breach has been remedied?
None
A bundle of separate contracts between an insurer and several insured companies in a group of
companies are all contained in a single insurance policy. This may be described either as a
A. composite policy or coinsurance.
B. composite policy or contribution.
C. joint policy or coinsurance.
D. joint policy or a reinsurance policy.
A. composite policy or coinsurance.
Ian’s speedboat suffered damage during a storm. The insurer identified that a design fault on the
boat was a second and concurrent cause of the damage. Neither the storm nor the design fault
would have caused the loss on its own. Ian’s marine insurance policy provided cover against storm
damage but the design fault was an uninsured peril. How, if at all, would Ian’s insurer be liable for
the claim?
A. It would be liable for one half of the claim.
B. It would be liable for the claim in full.
C. It would only be liable for the portion of the claim caused by the storm.
D. It would not be liable for the claim at all.
B. It would be liable for the claim in full.
What is this an example of: ‘a building might be damaged by a fire that was raging and a storm battering it a the same time’
Concurrent causes
‘a building might be damaged by a fire that was raging and a storm battering it a the same time’
what would happen in this situation if the perils are independent and either one would have caused some loss without the other?
the insurer is simply liable for that part of the loss attributable to whichever peril is insured
Under Concurrent perils:
what happens if the independent perils combine to cause a loss i.e each would have caused some loss on its own
Insurers will pay for the loss attributable to the insured peril only
Under concurrent perils:
What happens if two interdependent perils combine to cause a loss and neither would have caused a loss on its own-
Insured perils plus excluded peril: no liability for the loss and exclusion prevails
Insured perils plus uninsured peril: full liability for the loss and insured peril prevails
When Fred’s yacht ran aground on rocks, he abandoned his rights to the yacht to his insurer but did
NOT serve a formal notice of abandonment on the insurer. If Fred submits a claim, the insurer is
entitled to classify it as
A. an actual total loss.
B. a constructive total loss.
C. a partial loss.
D. salvage.
C. a partial loss.
Under marine insurance- what is a constructive total loss
it applies when the subject matter is damaged or the insured is deprived of the possession of their ship or goods but the subject matter is not destroyed.
Under Marine Insurance- what is this:’it is unlikely that the insured can recover the ship or goods’
constructive total loss
Under Marine Insurance- what is this:’in the case of a damage to a ship, the cost of repairing the damage would exceed the value of the ship when repaired’
constructive total loss
Under Marine Insurance- what is this: in the case of damage to goods, where the cost of repairing the damage and forwarding the goods to their destination would exceed their value on arrival
constructive total loss
Under marine insurance what happens if there is an actual total loss?
Abandonment is automatic
Following the case of Lister v. Romford Ice and Cold Storage Ltd (1957), insurers generally agreed to
A. give up their subrogation rights against workers who negligently injure their fellow employees in
the course of employment.
B. waive their subrogation rights between subsidiary and associated companies of an insured.
C. use the independent liability method for the calculation of contribution.
D. pursue subrogation rights against directors on the grounds of vicarious liability.
A. give up their subrogation rights against workers who negligently injure their fellow employees in
the course of employment.
What case does this refer to:
‘a worker injured a fellow employee in the course of his employment. The injured employee recovered damages from his employer because they were vicariously liable. The employer then proceeded to bring a successful action against the negligent employee to recover what they had paid. However, criticism of the industry led insurers to generally agree to give up their subrogation rights in such cases’
Lister v. Romford Ice and Cold Storage Ltd
Tina has an insurance policy which contains a contribution condition known as an escape clause.
She takes out a second policy with another insurer, but despite the cover under the two policies
overlapping, the original policy is NOT avoided using the escape clause. This is because
A. both policies have an escape clause so they cancelled each other out.
B. statute law prohibits the use of escape clauses.
C. Tina has notified both insurers of the double insurance.
D. Tina has obtained the consent of her insurers
D. Tina has obtained the consent of her insurers
What is an escape clause?
A condition that effectively forbids the insured from taking out another policy without the consent of insurers on the same risk.
On an escape clause what happens if a person takes out two policies and both prohibit other insurances?
The second policy never operates because of the existing policy in force. The first insurers are liable for the loss
An insurer is entitled to make a profit following
A. abandonment of property by the insured.
B. contribution from another insurer.
C. exercise of subrogation rights.
D. settlement by indemnity.
A. abandonment of property by the insured.
What is the main purpose of subrogation?
It is to prevent someone form unfairly profiting from their loss
What two ways can subrogation operate?
where the insured has succeeded ‘in recovering for the same loss twice’ i.e collected a claim payment from the insurers and also recovered compensation from another source.
-insurers who have indemnified the insured in respect of the loss may themselves bring an action against the third party who is legally responsible for it
For subrogation to arise, what must the insured actually have succeeded from:
‘recovering for the same loss twice’ i.e collected a claim payment from his insurers and also recovered compensation for the same loss from another source
What is contribution?
The right of an insurer to call upon others similarly, but not necessarily equally liable to the same insured to share the cost of an indemnity payment
What are the three subrogation right sources
In tort
In contract
Under statute
Two policies with different insurers cover the same loss of £12,000. The limit of liability is £20,000
under policy X and £40,000 under policy Y. Neither policy is subject to average or has a non
contribution clause, but policy X is subject to a £4,000 excess. Using the independent liability
method of calculating contribution, what amount will policy X contribute towards the claim
payment?
A. £2,000
B. £4,000
C. £4,800
D. £7,200
C. £4,800
What are the five common rules for contribution to arise
1- each policy is liable for the loss
- each insurers the same interest in the subject matter
- two or more policies of indemnity exist
- each insurers the subject matter of the loss and
- each insurers the peril which brings about the loss
What the two basis of contribution?
Maximum Liability method
Independent Liability method
Under contribution what is the maximum liability method?
The loss is shared by insurers in proportion to the maximum amount of cover that is available under each policy is equivalent to the sum insured
What is the independent liability of the following:
Policy A- Sum insured £10,000
Policy B- Sum insured £20,000
Loss - £6,000
1- Calculate independent liability of Policy A (the amount payable if A was the only policy in force) £6,000
2- Calculate independent liability of Policy b - £6,000
- the loss is shared in proportion of the two independent liabilities
A pays - £6,000/ 12,000 x £6,000= £3,000
B pays - £6,000/ £12,000 x £6,000 = £3,000
What is the independent liability of the following:
Policy A- Sum Insured £10,000
Policy B- Sum Insured £20,000
Loss- £15,000
Calculate independent liability of policy A -£10,000
Calculate independent liability of policy B- £15,000
The loss is shared in proportion of the two independent liabilities
A pays£10,000/ £25,000 x £15,000 = £6,000
B pays £15,000/ £25,000 x £15,000= £9,000
What is the independent liability of the following:
Policy A- Sum Insured £10,000
Policy B- Sum Insured £20,000
Loss- £6,000
A has an excess of £2,000
1- Calculate independent liability of Policy A £4,000 due to the £2k excess
2- Calculate independent liability of Policy b - £6,000
- the loss is shared in proportion of the two independent liabilities
A pays - £4,000/ 10,000 x £6,000= £2,400
B pays - £6,000/ £10,000 x £6,000 = £3,600
The effect of the European Communities Act 1972 on statutory interpretation is that English courts
must
A. adopt a literal approach.
B. adopt a purposive approach.
C. apply domestic legislation in line with European Community obligations.
D. take into account judgments from the European Court of Justice.
B- A purposive approach
C. apply domestic legislation in line with European Community obligations.
D. take into account judgments from the European Court of Justice.
The Crown consists of A. the armed forces. B. Government ministers. C. the Privy Council. D. the police. E. the reigning Monarch.
A. the armed forces.
B. Government ministers.
C. the Privy Council.
E. the reigning Monarch.
Following a motor accident, an insured may be able to claim for special damages for A. damage to clothing. B. injury to feelings. C. loss of earnings. D. medical expenses. E. pain and suffering.
A. damage to clothing.
C. loss of earnings.
D. medical expenses.
In contract law, acceptance of an offer A. may be achieved by taking no action. B. may be implied by conduct. C. may vary the terms of the offer. D. must be made in writing. E. must exactly match the terms of the offer.
B. may be implied by conduct.
E. must exactly match the terms of the offer.
An agency will be automatically terminated
A. by lapse of time if the agreement was created for a specific period of time.
B. by mutual agreement of the parties.
C. by performance of the task specified in the agreement.
D. on bankruptcy of the agent.
E. on death of the principal.
A. by lapse of time if the agreement was created for a specific period of time.
B. by mutual agreement of the parties.
C. by performance of the task specified in the agreement.
E. on death of the principal.
Which material facts do NOT need to be disclosed by a manufacturing company in an insurance
proposal?
A. Factors which lessen the risk.
B. Facts about a trade which the insurer regularly underwrites.
C. Facts which the insurer’s risk survey should have revealed.
D. Facts which were waived by previous insurers.
E. Unusual features of a risk that the insurer’s standard survey would not reveal.
A. Factors which lessen the risk.
B. Facts about a trade which the insurer regularly underwrites.
C. Facts which the insurer’s risk survey should have revealed.
An insurance contract is subject to waiver by estoppel when an insurer is aware of a breach of a
warranty by an insured, but the insurer then goes on to
A. accept further premiums.
B. advise the insured about future loss prevention.
C. decline to renew the policy.
D. resist a claim on grounds other than breach of warranty.
A. accept further premiums.
B. advise the insured about future loss prevention
D. resist a claim on grounds other than breach of warranty.
Common law rules for the interpretation of insurance policies include the
A. application of a technical or legal meaning.
B. contra proferentum rule.
C. mischief rule.
D. presumption of the ordinary meaning.
A. application of a technical or legal meaning.
B. contra proferentum rule.
D. presumption of the ordinary meaning.
Which insurance terms and conditions can reduce a policyholder’s entitlement to a full indemnity following a loss? A. An average clause. B. An operative clause. C. A policy excess. D. A subrogation clause.
A. An average clause.
C. A policy excess.
An insurer’s subrogation rights may arise A. following an ex gratia payment. B. in contract. C. in tort. D. under estoppel. E. under statute.
B. in contract.
C. in tort.
E. under statute.
When would the court apply the contra proferentem rule?
when an insurance contract is ambiguous
For the contra preoferentem rule to apply what must happen?
There must be genuine ambiguity
What are the three rules of common law rules?
literal rule- primary rule and takes precedence
Golden rule
Mischief rule
Which two branches of civil law have most relevance in the context of insurance? A. Contract and property. B. Contract and torts. C. Property and trusts. D. Torts and trusts.
B. Contract and torts.
Minor civil cases relating to personal injury claims are usually dealt with by the A. county courts. B. Court of Appeal. C. divisional courts of the High Court. D. magistrates courts.
A. county courts.
What is an unincorporated association?
It’s groups of people which has not been incorporated in the same as as corporations
What are the following an example of:
-small social clubs and voluntary organisations with a few participants
Unincorporated association
What are the following an example of:
- small businesses set up as partnerships
Unincorporated association
What are the following an example of:
- trade unions with memberships of a million or more
Unincorporated association
Unlike corporations, what are unincorporated associations not treated like:
not generally treated as separate legal entities.
What are the following an example of:
‘they are simply groups of individuals, each of whom is a natural legal person with their own legal rights and responsibilities’
Unincorporated association
What does it mean by a member who makes a contract on behalf of an unincorporated association has a personal liability under the contract
this means that a member who arranges insurance is personally liable to pay for the cover. the other members of the club will only be liable if they authorise of ratify the contract.
Are members of unincorporated associations generally liable for their own tort even if they are committed in the course of the associations activities?
Yes
Unincorporated association - if a member of a club negligently injures another, will they be personally liable and no other member bear any responsibility?
Yes
What is a lien?
A right to retain the goods of another as security for payment of a debt
A characteristic of a limited company is that
A. all members play an active role in management of the business.
B. details of its financial accounts may be kept private.
C. it must be in business with a view of profit.
D. its activities are defined in the memorandum of association
D. its activities are defined in the memorandum of association
In negligence, what standard of care would be required of a newly-qualified electrician?
A. The standard for the profession only.
B. The standard for the profession but with an allowance for the electrician’s level of inexperience.
C. The standard of a prudent man.
D. The standard of a reasonable man.
A. The standard for the profession only.
One of the requirements for a claimant to succeed in an action for trespass to the person is A. intention. B. negligence. C. prescription. D. recklessness
A. intention.
A claim under a policy of indemnity may be described as a claim for unliquidated damaged. This means what:
the exact amount of the compensation is not known in advance but is to be fixed afterwards on the basis of the loss actually suffered
A gardener who was entitled to £2,000 under a contract with a private client assigned her rights
under the contract to one of her plant suppliers. To be legally valid as a statutory assignment, this
assignment must be
A. absolute.
B. a contract under seal.
C. in writing and signed by the debtor.
D. supported by consideration.
A. absolute.
Statutory assignment is where what happens?
the assignment of a debt or chose in action transfers the underlying legal right to the assignee
Under Statutory assignment what are three ways an assignment must be
a) absolute
b) in writing (although no particular form is necessary)
c) expressly made in writing to the debtor or trustee
If an assignment does not comply with all the requirement for a statutory assignment how will it still take effect?
equitable assignment
What two ways can equitable assignment take place?
1- the assignor informs the assignee that they transfer the chose to them or
2- the assignor instructs the debtor to discharge the obligation by payment.
After what period of time does an action for breach of a simple contract become statute-barred if
the action is NOT in respect of personal injuries?
A. 1 year.
B. 3 years.
C. 6 years.
D. 12 years.
C. 6 years.
What is the limitation period for a claim for libel or slander?
One year
What is the limitation period for personal injury claims?
three years
gratuitous promise is contractually valid and binding on the promissor when it is A. accepted by a minor. B. a domestic or social arrangement. C. presented in writing. D. in the form of a deed.
D. in the form of a deed.
What is this an example of:
‘a promise to make a donation to charity for no return’
Gratuitous promise, generally not foreseeable unless its the form of a deed
An agent may be able to protect his rights to remuneration and indemnity by
A. accepting commission from both parties to a transaction.
B. accounting for the principal’s money separately.
C. exercising a lien on the principal’s property.
D. signing his name on a negotiable instrument.
C. exercising a lien on the principal’s property.
secretary regularly books accommodation at a hotel on behalf of her employer. On one occasion,
she also booked a hotel room for her husband and herself without her employer’s permission.
Based on what principle of agency law, could the employer be legally liable to the hotel for
payment of the room charge?
A. Breach of warranty of authority.
B. Implied actual authority.
C. Ostensible authority.
D. Ratification by an undisclosed principal
C. Ostensible authority.
An agent for a disclosed principal commits the tort of deceit by knowingly making false statements
to a third party. Who, if anyone, is legally liable if the third party suffers a financial loss as a result
of these statements?
A. No one.
B. The agent only.
C. The principal only.
D. Both the agent and the principal
D. Both the agent and the principal
What happens if an agent commits a tort when acting in the course of their authority
The principle will be liable as well
Two key elements of insurable interest are that the policyholder must have
A. a current interest and a legal interest.
B. a current interest and a sole interest.
C. an expectancy of an interest and a financial interest.
D. an expectancy of an interest and a sole interest.
A. a current interest and a legal interest.
During the period of insurance of a commercial policy, the policyholder acquires a subsidiary
company for which cover is required under the policy. What specific legal duty of disclosure,
applies, if any, in respect of this subsidiary company at the date of acquisition?
A. The duty to disclose all material facts relating to the additional risk.
B. The duty to make a fair representation of the additional risk.
C. The duty to take reasonable care not to misrepresent the additional risk.
D. None, as the duty of disclosure only applies at the renewal date.
B. The duty to make a fair representation of the additional risk.
A duty of disclosure exists as part of the duty of fair presentation of the risk in relation to what contracts?
non- consumer insurance contracts
If an agent was deemed to be acting for the insurer in handling a proposal form, would insurers be able to avoid the policy for breach of the duty of fair presentation?
No
n consumer insurance law, a proposer for personal accident insurance is under a duty to
A. disclose all material facts relating to the contract.
B. make a fair representation of the risk.
C. take reasonable care not to make a misrepresentation.
D. warrant that all answers on the proposal form are accurate.
C. take reasonable care not to make a misrepresentation.
The subject matter of an insurance policy CANNOT be A. a future inheritance. B. a loss of profits. C. intangible property. D. the life of another person.
A. a future inheritance.
For a breach of the duty of fair presentation, if it is innocent do Insurers have the right to avoid the policy as a whole have the right to avoid the policy as a whole
Yes- if the insurer meets the burden of proof
For a breach of the duty of fair presentation, if it is fraudulent do Insurers have the right to avoid the policy as a whole
Yes
For a breach of the duty of fair presentation, if it is innocent do Insurers have the right to avoid the policy as a whole have the right to keep the premium as well?
No
For a breach of the duty of fair presentation, if it is fraudulent do Insurers have the right to avoid the policy as a whole have the right to keep the premium as well?
Yes
For a breach of the duty of fair presentation, if it is innocent do Insurers have the right to ignore the breach and allow the policy to stand?
Yes
For a breach of the duty of fair presentation, if it is fraudulent do Insurers have the right to ignore the breach and allow the policy to stand?
Yes- although unlikely
For a breach of the duty of fair presentation, if it is innocent do Insurers have the right to refuse a particular claim but allow the policy to stand?
Yes
For a breach of the duty of fair presentation, if it is fraudulent do Insurers have the right to refuse a particular claim but allow the policy to stand?
Yes- but highly unlikely
In non- consumer insurance, what 6 things to not need to be disclosed even if they are material:
- matters of law
- factors which lessen the risk
- facts known by the insurers and those which the insurers ought to know
- information that is waived by the insurers
- facts which the proper does not know
- convictions that are spent under the Rehabiltations of Offenders act
For duty of disclosure when do pre-contractual information duties commence?
at the commencement of negotiations and come to an end once the contract is concluded.
As contracts of insurance are contracts based upon utmost good faith what does that mean?
the parties must act in good faith
In business insurance, the insurers remedy for breach of the duty of fair presentation of the risk depends on what?
Whether it was deliberate or reckless
What principle or rule is given special treatment by law for employers’ liability insurance?
A. The applicability of basis of contract clauses.
B. The avoidance of liability for breach of condition nor warranty.
C. The effect of a lack of insurable interest.
D. The range of remedies following a misrepresentation.
B. The avoidance of liability for breach of condition nor warranty.
Where, if at all, is the use of basis of the contract clauses legally permitted?
A. In consumer insurance policies only.
B. In non-consumer insurance policies only.
C. In both consumer and non-consumer insurance policies.
D. In neither consumer nor non-consumer insurance policies.
D. In neither consumer nor non-consumer insurance policies.
On what basis is an insurance policy void if a proposer bought pet insurance for his tortoise which
he thought was in hibernation, but in fact the tortoise had already died?
A. Anticipatory breach.
B. Fundamental mistake.
C. Illegality.
D. Misrepresentation.
B. Fundamental mistake.
What is this an example of: before the time for performance of the contract arrives, one party may indicate that they will not fulfil their part of the bargain
Anticipatory breach
What is this an example of:
a seller who has agreed to deliver goods to one person may disable themselves by selling them to someone else before the date of delivery has come
anticipatory breach
What happens if there is an anticipatory breach?
the right to sue for breach arises at once.
policyholder makes a claim for damage to his motor vehicle. After investigation, the insurer discovers the vehicle was being used by the policyholder in a criminal act. In these circumstances,
the insurance policy is
A. valid and the claim will be paid.
B. valid but the claim will be rejected.
C. void.
D. voidable at the option of the insurer.
C. void.
On what basis can contracts be voidable?
Misrepresentation
drunkenness or insanity etc
What are the 5 main rules of consideration?
1- it must be real or genuine 2- it doesn't have to be adequate 3- it can't be in the past 4- it must move from the promisee 5- it must not be something that the promisee is already bound to do
What are the three categories for contracts made by minors
Contracts which are binding- bound for necessaries such as foodstuffs and clothing
Contracts which are binding unless repudiated– leases, partnerships etc
Contracts which aren’t binding- which aren’t necessaries and to borrow money
Which term of a consumer insurance contract, if never fulfilled by the policyholder, would
automatically result in the entire insurance contract being void?
A. A condition precedent to the contract.
B. A condition precedent to liability.
C. An express warranty.
D. An implied warranty.
A. A condition precedent to the contract.
What remedy is available to an insurer where a commercial policyholder has breached a collateral condition concerning a minor matter? A. Avoid the policy ab initio. B. Apply terms retrospectively. C. Claim for damages. D. Repudiate any future claim.
C. Claim for damages.
What is a collateral condition?
Its regarded as minor terms and usually trivial.
What happens is there is a breach of the collateral condition?
The insurer will have to pay for the insured’s loss but may claim damages
What is this an example of:
‘a clause in an EL policy which requires the insured to keep a record of wages in a a proper wages book?
Collateral condition
The basis of burden of proof that a named insured peril was the proximate cause of the loss falls
upon the
A. policyholder to prove on the balance of probabilities.
B. policyholder to prove beyond reasonable doubt.
C. insurer to prove on the balance of probabilities.
D. insurer to prove beyond reasonable doubt.
A. policyholder to prove on the balance of probabilities.
Who does the burden of proof rely on?
The policyholder who has to prove it
To discharge the burden of proof, the insured must be able to establish two things:
1- that the loss was caused bu the operation of an insured peril
2- the amount of his loss
this must be established by the policyholder on ‘the balance of probabilities’
When two perils are described as interdependent, this means that they combine to cause a loss
A. and either peril would cause some loss without the other.
B. but neither peril can be an uninsured or an excepted peril.
C. but neither peril would cause some loss on its own.
D. but only one peril is operating or imminent.
C. but neither peril would cause some loss on its own.
What is the effect of a clause in an insurance contract that excludes losses directly or indirectly
caused by acts of terrorism?
A. Terrorism cover cannot be provided by a separate buy-back policy.
B. Terrorism is an uninsured peril in relation to concurrent causes.
C. Terrorism must be the proximate cause of the loss in order for the exclusion to operate.
D. Terrorism need only be a remote cause of the loss in order for the exclusion to operate.
D. Terrorism need only be a remote cause of the loss in order for the exclusion to operate.
Under the Consumer Rights Act 2015, a contract term in an insurance policy will be considered
unfair to the policyholder if it
A. causes a significant imbalance in the parties’ rights and obligations to the detriment of the
policyholder.
B. defines a particularly narrow scope of cover in relation to the premium paid by the policyholder.
C. is a standard term that the policyholder does not have the opportunity to individually negotiate.
D. is ambiguous and one interpretation of the term is detrimental to the policyholder.
A. causes a significant imbalance in the parties’ rights and obligations to the detriment of the
policyholder.
What does the Unfair Contract Terms Act 1977 apply to?
Business to business contracts
What does the Consumer Right Act 2015 relate to?
Consumer Contracts
What is the effect of the Unfair Contract Terms Act 1977
Makes reference to ‘reasonableness test’- burden of proof of reasonableness on the party seeking to rely on the restrictive term
What is the effect of the Consumer Right Act 2015
subjects terms to a ‘fairness test’ with the burden of proof on the consumer
A broker, acting for a commercial policyholder, is reviewing a policy wording drawn up by an
insurer. The broker proposes an additional clause for insertion into the policy, which the insurer
agrees to incorporate. Against which party to the contract will the clause be construed in the event
of its ambiguity?
A. The broker and the insurer equally.
B. The broker and the policyholder equally.
C. The insurer only.
D. The policyholder only.
D. The policyholder only.
express actual authority arises from what
instructions which have been given to the agent stating what is required nad what is allowed.
What happens if under express actual authority are ambiguous?
No liability will fall on the agent provided that they acted in good faith
Why when a broker is acting on behalf of the insured will ambiguity be found in favour of the insurer
because the broker will be acting as agent for the insured so will fall on policyholder
A policy condition requiring the policyholder to give notice of a loss and also any incident or event
which may give rise to a claim, is most relevant in an insurance policy covering
A. personal accident.
B. professional liabilities.
C. property damage.
D. travel risks.
B. professional liabilities.
A fire destroys a business premises and the policyholder receives payment of the full sum insured
from his property insurer. If the premises are rebuilt on the same site during the current policy
period, new insurance for the premises will be arranged under
A. a new policy at new terms.
B. an endorsement to the existing policy for an additional premium.
C. the existing policy subject to a reinstatement premium.
D. the existing policy at no additional premium.
A. a new policy at new terms.
What are non- indemnity (contingency insurances)
where insurers agree to pay a specified sum when a particular defined event occurs. they no not have to prove that they have a suffered a loss
Which insurance policy can make a deduction for betterment?
A. An agreed value policy for a vintage car.
B. A new for old household contents insurance policy.
C. A personal accident insurance policy.
D. A property insurance policy for business machinery.
D. A property insurance policy for business machinery.
what are the two ways indemnity if normally valued for machinery and equipment?
- the cost of repair less an allowance for wear and tear
- the cost of replacement, less wear and tear if repair is not possible.
It is usual for an insurer to insert a subrogation waiver clause into a contract to agree with a
policyholder that the insurer will NOT exercise subrogation rights against
A. other insurers.
B. reinsurers.
C. subsidiary companies of the policyholder.
D. any third parties.
C. subsidiary companies of the policyholder.
A policyholder’s motor vehicle has suffered damage caused by a negligent third party. The damage
cost £900 to repair with the insurer making payment of £800 after deduction of the £100 policy
excess. The insurer recovered £500 from the negligent motorist. How will this £500 recovery be
distributed?
A. The policyholder is entitled to £100 and the insurer £400.
B. The policyholder is entitled to £200 and the insurer £300.
C. The policyholder is entitled to the full £500.
D. The insurer is entitled to the full £500.
D. The insurer is entitled to the full £500
The maximum liability method of calculating contribution operates, but with unfair results, if only one of the relevant policies A. has additional named insureds. B. includes a subrogation clause. C. is a policy of indemnity. D. is subject to a policy excess.
D. is subject to a policy excess.
Two property insurance policies cover the same loss but the policy terms and conditions differ.
Following a claim, which method of calculating contribution is most likely to be used, if any?
A. No method would be used.
B. The independent liability method.
C. The maximum liability method.
D. The reinstatement method.
B. The independent liability method.
A persuasive precedent may be set by
A. a decision made in the lower courts.
B. a decision made by the Judicial Committee of the Privy Council.
C. a local custom.
D. obiter dicta of senior judges in a high-level decision.
E. the ratio decidendi of a previous case with similar issues.
A. a decision made in the lower courts.
B. a decision made by the Judicial
D. obiter dicta of senior judges in a high-level decision.
What are the key characteristics of a legal partnership?
A. All partners must agree to the appointment of a new partner.
B. It is in business with a view to making a profit.
C. The death of a partner does not affect continuation of the partnership.
D. The liability of its partners is always limited.
A. All partners must agree to the appointment of a new partner.
B. It is in business with a view to making a profit.
Which torts are actionable per se? A. Assault. B. Conversion. C. False imprisonment. D. Negligent misstatement. E. Private nuisance.
A. Assault.
B. Conversion.
C. False imprisonment.
What is actionable per se?
Where you don’t have to prove you have suffered loss or damage
An employers’ liability insurance policy can be classified as being a type of A. bilateral contract. B. collateral contract. C. contract under seal. D. simple contract. E. unilateral contract.
A. bilateral contract.
D. simple contract.
What kind of contract is it where each party makes a promise to the other and both are legally bound
bilateral contract
What kind of contract is it where each party makes a promise to the other and only one are legally bound
unilateral contract
What is this an example of:
a promise by the owner to pay a reward for lost property may be legally binding but only on the party who offers the reward
unilateral contract
What is a simple contact
all contracts that don’t have to be witnessed by seal - such as insurance policies
When may an agent be legally allowed to delegate contractual duties to a sub agent without the
express permission of the principal?
A. In accordance with trade custom.
B. Only if the sub agent is based overseas.
C. Out of necessity.
D. Whenever it is cheaper to do so.
A. In accordance with trade custom.
C. Out of necessity.
Under statutory provisions, what legal remedy is available to an insurer where a qualifying
misrepresentation, which is careless, has been made?
A. Amend the contract terms from those originally agreed.
B. Avoid the contract and keep any premium paid.
C. Maintain the contract but avoid any claims relating to the misrepresentation.
D. Proportionately reduce the amount to be paid on a claim if a higher premium would have been
charged.
A. Amend the contract terms from those originally agreed.
D. Proportionately reduce the amount to be paid on a claim if a higher premium would have been
charged.
An insurance contract would automatically become void in the event of A. bankruptcy of an agent. B. frustration. C. illegality. D. misrepresentation.
B. frustration.
C. illegality.
What 5 ways can a contract be discharged
1- performance 2- breach 3- frustration 4- agreement 5- operation of law
What is the effect of frustration?
it automatically brings the contract to an end
What happens if a contract may become impossible to perform or illegal or futile because of some unexpected turn of events after the contract is made?
the contract is ‘frustrated’.
What 5 ways can a contract be ended by frustration?
1 - change in law
2- destruction of a thing necessary for the contract
3- non occurance of an event on which the contract depends
4- commercial purpose of the contract frustrated
5- death or personal capacity
Which rules apply to deal with issues regarding inconsistencies or contradictions in policy wordings?
A. An express term overrules or modifies any implied term.
B. An implied term overrules or modifies any express term.
C. Handwritten endorsements take priority over printed words in a policy document.
D. A policy document takes priority over a proposal form.
A. An express term overrules or modifies any implied term.
C. Handwritten endorsements take priority over printed words in a policy document.
D. A policy document takes priority over a proposal form.
Which items are most commonly insured on an agreed value basis? A. Antiques. B. Golf clubs. C. Household appliances. D. Ships. E. Works of art.
A. Antiques.
D. Ships.
E. Works of art.
The operation of the principle of subrogation, and the way in which any recovery from a third party
is shared between the policyholder and the insurers, depends on
A. the amount of the recovery in relation to the loss.
B. the time when subrogation rights arise.
C. whether the insurance covers the loss in full.
D. whether there is a non contribution clause.
A. the amount of the recovery in relation to the loss.
C. whether the insurance covers the loss in full.
The final court of appeal for a number of commonwealth countries is the
A. Crown Court.
B. High Court.
C. Judicial Committee of the Privy Council.
D. Supreme Court.
C. Judicial Committee of the Privy Council.
What are terms implied in fact
where it is not actually stated but is presumed to be intended by the parties- sometimes it is so obvious that it goes without saying
What are terms implied by custom or usage
by custom of the market in which the parties to the contract operate or the usages of a particular locality or trade
What are terms implied in law
the rights and duties of the parties are based on which law automatically applies
An insurance broker grants cover for motor insurance to a 21-year-old proposer. However, the
broker’s authority is restricted to only granting cover to drivers aged 23 years and over. What basis,
if at all, is the insurer bound to cover the 21-year-old?
A. Agency by estoppel.
B. Apparent authority.
C. Implied actual authority.
D. The insurer is not bound.
B. Apparent authority.
Whilst Tim was on holiday, unknown to him his agent made a contract on his behalf. Tim is happy
to ratify the contract but he does want to change a minor term. The services under the contract are
scheduled to be carried out next week. What is the legal position regarding ratification of the
contract?
A. Tim cannot ratify the contract as it was made without his knowledge.
B. Tim cannot ratify the contract excluding the minor term as the whole contract must be ratified.
C. Tim can ratify the contract and change the term as it is only a minor term.
D. Tim can ratify the contract and change the minor term if this is done within reasonable time.
B. Tim cannot ratify the contract excluding the minor term as the whole contract must be ratified.
Alice acted as an agent for Ted in a house clearance sale and has successfully claimed commission
by implied agreement. What does this indicate about the commission?
A. It was agreed as it was based on a verbal agreement.
B. It was agreed as it was detailed in an agency contract.
C. It was not agreed, but Alice had a lien on Ted’s property.
D. It was not agreed, but Alice’s work was in her usual line of business for which she would
normally be paid.
D. It was not agreed, but Alice’s work was in her usual line of business for which she would
normally be paid.
In respect of consumer contracts the practical application of the doctrine of utmost good faith
means that the
A. broker has a duty to the proposer to find the widest coverage at the best price.
B. insured and the insurer have a duty of confidentiality regarding contract information.
C. proposer and the broker have a joint duty to disclose all material facts relating to the contract.
D. proposer and the insurer have a duty to deal honestly and openly in negotiations leading to
formation of the contract.
D. proposer and the insurer have a duty to deal honestly and openly in negotiations leading to
formation of the contract.
When effecting a household contents insurance policy, the proposer deliberately provided the
insurer with misleading information and so the insurer avoided the policy. In what circumstances, if
any, is the insurer obliged to return the premium to the policyholder?
A. In no circumstances.
B. The premium exceeds a de minimis amount.
C. The premium was paid on day one of the policy period.
D. Retaining the premium would be unfair to the policyholder.
D. Retaining the premium would be unfair to the policyholder.
Under English Law, the right to insure the life of another person arises if there is
A. the consent of the Law Commission.
B. the consent of the life assured.
C. a financial relationship recognised at law.
D. a relationship characterised by a close bond of natural affection.
C. a financial relationship recognised at law.
Under English law, an element of statutory control over the wording of consumer insurance policies
is imposed by the
A. Consumer Insurance (Disclosure and Representations) Act 2012.
B. Consumer Protection Act 1987.
C. Consumer Rights Act 2015.
D. Unfair Contract Terms Act 1977.
C. Consumer Rights Act 2015.
Why may an insurer insert a continuing warranty into an insurance policy?
A. To avoid paying a loss if it is caused by a peril stated in the policy.
B. To enable an insurer to charge an additional premium if the warranty is breached.
C. To ensure that a full sum insured is declared to avoid underinsurance.
D. To ensure that measures are taken to improve risk management.
D. To ensure that measures are taken to improve risk management.
What happens if there is a breach of condition precedent to liability
Insurers are automatically discharged from liability for the claim which is tainted by the breach but the policy remains in force
What happens if there is a breach of a condition precedent to the contract
it is never fulfilled and the contract never comes into existence
warranty in a household buildings insurance policy states that the chimney of the property should
be professionally swept every year prior to winter use. A loss occurs as a result of severe winds and
the chimney is damaged. How is the insurer legally entitled to respond to the claim for property
damage to the chimney if the insured has breached the warranty?
A. Avoid the claim but keep the policy in force.
B. Reduce the claim payment pro rata.
C. Reject the claim and terminate the policy.
D. Settle the claim in full.
D. Settle the claim in full.
A policyholder has a fire insurance policy which excludes storm and other perils. A fire broke out
due to faulty machinery overheating. At the same time as the fire, a violent storm blew the roof off
the buildings and caused a power cut so that the fire alarm did not operate. This led to a more
serious fire than would have occurred otherwise. For what damage, if any, would the fire insurers
be liable?
A. The fire damage only.
B. The fire damage only less a reduction for the fire alarm being non-operational.
C. The fire damage and the storm damage as they are concurrent causes.
D. No damage.
A. The fire damage only.
Ian’s speedboat suffered damage during a storm. The insurer identified that a design fault on the
boat was a second and concurrent cause of the damage. Neither the storm nor the design fault
would have caused the loss on its own. Ian’s marine insurance policy provided cover against storm
damage but the design fault was an uninsured peril. How, if at all, would Ian’s insurer be liable for
the claim?
A. It would be liable for one half of the claim.
B. It would be liable for the claim in full.
C. It would only be liable for the portion of the claim caused by the storm.
D. It would not be liable for the claim at all.
B. It would be liable for the claim in full.
When Fred’s yacht ran aground on rocks, but was NOT totally destroyed, he abandoned his rights to
the yacht to his insurer but did NOT serve a formal notice of abandonment on the insurer. If Fred
submits a claim, the insurer is entitled to classify it as
A. an actual total loss.
B. a constructive total loss.
C. a partial loss.
D. salvage.
C. a partial loss.
An insurer is entitled to make a profit following an insured loss when
A. the property is abandoned by the insured.
B. contribution is received from another insurer.
C. subrogation rights are exercised.
D. settlement is by way of indemnity.
A. the property is abandoned by the insured.
Two policies with different insurers cover the same loss of £12,000. The limit of liability is £20,000
under policy X and £40,000 under policy Y. Neither policy is subject to average or has a non
contribution clause, but policy X is subject to a £4,000 excess. Using the independent liability
method of calculating contribution, what amount will policy X contribute towards the claim
payment?
A. £2,000
B. £4,000
C. £4,800
D. £7,200
C. £4,800
The effect of the European Communities Act 1972 on statutory interpretation is that English courts
must
A. adopt a literal approach.
B. adopt a purposive approach.
C. apply domestic legislation in line with European Community obligations.
D. take into account judgments from the European Court of Justice.
B. adopt a purposive approach.
C. apply domestic legislation in line with European Community obligations.
D. take into account judgments from the European Court of Justice.
A 17-year-old in full-time education can A. be fully responsible for his criminal actions. B. be a beneficiary of a trust. C. be a member of a jury. D. make a valid will. E. own a house outright.
A. be fully responsible for his criminal actions.
B. be a beneficiary of a trust.
Following a motor accident, an insured may be able to claim for special damages for A. damage to clothing. B. injury to feelings. C. loss of earnings. D. medical expenses. E. pain and suffering.
A. damage to clothing.
C. loss of earnings.
D. medical expenses.
In contract law, acceptance of an offer A. may be achieved by taking no action. B. may be implied by conduct. C. may vary the terms of the offer. D. must be made in writing. E. must exactly match the terms of the offer.
B. may be implied by conduct.
E. must exactly match the terms of the offer.
An agency will be automatically terminated
A. by lapse of time if the agreement was created for a specific period of time.
B. by mutual agreement of the parties.
C. by performance of the task specified in the agreement.
D. on bankruptcy of the agent.
E. on death of the principal
A. by lapse of time if the agreement was created for a specific period of time.
B. by mutual agreement of the parties.
C. by performance of the task specified in the agreement.
E. on death of the principal
Which material circumstances do NOT need to be disclosed by a manufacturing company in an
insurance proposal?
A. Factors which lessen the risk.
B. Details about a trade which the insurers regularly underwrite.
C. Information which the insurer’s risk survey should have revealed.
D. Unusual features of a risk that the insurer’s standard survey would not reveal
A. Factors which lessen the risk.
B. Details about a trade which the insurers regularly underwrite.
C. Information which the insurer’s risk survey should have revealed.
Common law rules for the interpretation of insurance policies include the
A. application of a technical or legal meaning.
B. contra proferentum rule.
C. mischief rule.
D. golden rule.
A. application of a technical or legal meaning.
B. contra proferentum rule.
What legal remedies, are available to an insured who has suffered a loss as a result of an insurer’s
unreasonably late payment of a claim?
A. Contractual damages.
B. Interest on any sums due under the policy.
C. Punitive damages.
D. Specific performance.
A. Contractual damages.
B. Interest on any sums due under the policy.
Which insurance terms and conditions can reduce a policyholder’s entitlement to a full indemnity following a loss? A. An average clause. B. An insuring clause. C. A policy excess. D. A subrogation clause
A. An average clause.
C. A policy excess.
An insurer’s subrogation rights may arise A. following an ex gratia payment. B. in contract. C. in tort. D. under estoppel. E. under statute.
B. in contract.
C. in tort.
E. under statute.
If a member of an unincorporated association commits a wrongful act that leads to legal liability, what is the position?
Select one:
a. The member is generally liable for their own acts.
b. The member will not generally be liable if it is committed in the course of the association’s activities.
c. All the association’s members are potentially jointly liable.
d. Only those responsible for managing the association’s affairs are potentially jointly liable.
a. The member is generally liable for their own acts.
What is the Law Commission responsible for?
Select one:
a. Dealing with certain types of appeal.
b. The consolidation and revision of statute law.
c. Dealing with complaints made against the judiciary.
d. Drawing up detailed rules and regulations to implement an Act passed by Parliament.
b. The consolidation and revision of statute law.
Under what circumstances may a ‘next friend’ be involved in a civil court case?
Select one:
a. As an adult who acts as a ‘mentor’ for a minor child in a court case.
b. As an adult who is primarily responsible for any costs awarded against a minor child.
c. As an adult who takes responsibility for the actions of a minor child under the age of 10.
d. As an adult who holds personal property on behalf of a minor.
b. As an adult who is primarily responsible for any costs awarded against a minor child.
In UK law, the principle of ‘equity’ is best described as:
Select one:
a. an element of criminal law.
b. an add-on that addresses concerns not covered under common law.
c. another word for ‘common law’.
d. a complete system of law.
b. an add-on that addresses concerns not covered under common law.
Kabir has just won a court case after being charged with trespass. The most likely reason for this is:
a. it was shown that it was the result of his direct actions.
b. the act was unintentional
c. he was able to prove that his actions were not criminal.
d. he was able to prove that the claimant had not incurred a loss.
the act was unintentional
James is to appear in court after allegedly driving his car into a third party. He should be aware that:
Select one:
a. the purpose of a civil action is primarily to punish James.
b. the purpose of a civil action is primarily to compensate the third party.
c. this type of court case is always going to be a criminal offence.
d. this type of court case is always going to be a civil offence.
b. the purpose of a civil action is primarily to compensate the third party.
What would NOT generally be regarded as a defence against a tort? Select one: a. Act of God. b. Self-defence. c. Volenti non fit injuria. d. Lack of intent.
d. Lack of intent
Under tort, if an individual is caught on video deliberately scratching their neighbour's car, this would be known as: Select one: a. trespass to goods. b. malicious damage. c. interference of goods. d. battery of property.
a. trespass to goods
With the principle of tort, it will:
Select one:
a. always involve a financial loss or criminal act.
b. usually, but not always, involve injury, damage or financial loss.
c. always involve a financial loss and be intentional.
d. always be intentional or deliberate.
b. usually, but not always, involve injury, damage or financial loss.
Why is the Consumer Protection Act 1987 important when looking at negligence?
Select one:
a. It introduced strict liability on faulty goods sold for private use.
b. It provides a statutory compensation scheme for those injured by faulty goods.
c. It automatically finds the manufacturer liable for any product it has sold.
d. It provides a simplified mechanism of pursuing claims through the courts.
a. It introduced strict liability on faulty goods sold for private use.
For a statutory assignment to take place under the Policies of Assurance Act 1867, what must occur for there to be a legal assignment?
Select one:
a. A written notice of assignment must be given to the insurer at its principal place of business.
b. The life policy is simply handed over to another party, as long as the intent is to assign it.
c. The assignment must be in writing and signed by the assignor and there must be some consideration.
d. The assignment must be in writing and signed by the assignor.
a. A written notice of assignment must be given to the insurer at its principal place of business.
A contract is defined as:
Select one:
a. evidence of the agreement, not the agreement itself.
b. a statement of intention.
c. a legally binding agreement.
d. the transfer of rights from one party to another.
c. a legally binding agreement
The expression a ‘discharge of contracts’ refers to how:
Select one:
a. the rights and obligations of each party under a contract come to an end.
b. the contract is originally established to ensure it becomes enforceable.
c. a party, who has a greater knowledge of the material facts than the other party, must disclose these when establishing the contract.
d. each party carries out the contract in good faith to both the letter and spirit of what was intended.
a. the rights and obligations of each party under a contract come to an end.
If an employee’s employment contract precludes them from working for a rival firm or setting up a competing business of their own, this is known as a:
Select one:
a. contract that is contrary to law.
b. illegal condition.
c. contract that is contrary to public policy.
d. restraint of trade.
d. restraint of trade
Under the Limitation Act 1980, what is the limitation period for personal injury claims and when does this start?
Select one:
a. Six years from the date the defendant was notified of the injury.
b. Three years from the date of the injury.
c. Six years from the date of the injury.
d. Three years from the date the defendant was notified of the injury.
b. Three years from the date of the injury.
ABC Ltd is claiming damages against XYZ Ltd for breach of contract. If ABC Ltd was successful, the damages would typically be:
Select one:
a. based on the cost plus punitive damages to ABC Ltd for putting right the contract.
b. based on the cost of putting right the contract so that ABC Ltd is in the financial position it would have been if the contract had been fulfilled fully and properly.
c. restricted to the cost of performing the contract that XYZ Ltd originally intended.
d. restricted to the cost of XYZ Ltd actually performing the contract.
b. based on the cost of putting right the contract so that ABC Ltd is in the financial position it would have been if the contract had been fulfilled fully and properly.
It is possible to cancel a debt by mutual agreement and to create a new debt in its place. What is this known as? Select one: a. Assignment. b. Equitable assignment. c. Novation. d. Delegated authority.
c. Novation
A contract between two parties cannot generally confer rights or impose obligations arising under it on any third parties. In common law, what is this known as? Select one: a. Rescission. b. An equitable remedy. c. Privity of contract. d. Mitigation of loss.
c. Privity of contract
What rights does an agent have over their principal?
Select one:
a. The right to have reasonable expenses reimbursed.
b. The right to be paid, even if not explicitly agreed.
c. The right to expect indemnity for unauthorised acts.
d. The right to freely sell the principal’s property to recover a debt.
a. The right to have reasonable expenses reimbursed.
In arranging insurance for their business premises, the insured gave information about the nature of the risk to an insurance intermediary. The intermediary was acting on behalf of the insurer but failed to pass this information on to the insurer. In the event of a subsequent related claim, what would the position be?
Select one:
a. The insurer would be bound by the contract because the insurer would be regarded as having the same information as the agent.
b. The insurer would be bound by the contract but only if the insured could prove that the information had not been communicated to the insurer by the agent.
c. The insurer would not be bound by the contract because they couldn’t be held to be party to a contract in which they didn’t have full information.
d. The insurer would not be bound by the contract as they are not responsible for the acts of those acting as their agent.
a. The insurer would be bound by the contract because the insurer would be regarded as having the same information as the agent
An insurance intermediary has an agency agreement with an insurer that allows them to issue policy documents. If the authority to claim postage costs is not explicitly set out in the agency terms, it may be allowed under the principle of: Select one: a. express authority. b. apparent authority. c. delegated authority. d. usual authority.
d. usual authority
Swift and Fast Ltd are negotiating the renewal of their insurances. This is being conducted by Steve, a director, with Megan, an independent insurance broker. The insurer is Instant Insure. Who is the principal? Select one: a. Steve. b. Instant Insure. c. Megan. d. Swift and Fast Ltd.
d. Swift and Fast Ltd.
Gina is acting as an agent of the insured. She has provided advice to the proposer on business insurance and completed a proposal form on their behalf for them to sign. If it becomes clear with a subsequent claim that incorrect pre-contractual information has been provided, the insurer may:
Select one:
a. settle the claim in full but seek to reclaim the full cost from Gina.
b. be able to avoid the policy. The insured would have no further recourse as they signed the proposal form.
c. settle the claim in full on the basis that as Gina is an agent, the insured is not directly responsible.
d. be able to avoid the policy. In this case, the insured may sue Gina for breach of duty.
d. be able to avoid the policy. In this case, the insured may sue Gina for breach of duty.
A lien is:
Select one:
a. a right to receive ongoing remuneration for work completed.
b. an ability to sue for damages.
c. a right to retain goods as security for the payment of a debt.
d. a right to be reimbursed for expenses incurred in the performance of duties.
c. a right to retain goods as security for the payment of a debt
A principal has just unilaterally served the notice required to terminate the agreement with their agent. This is known as termination by: Select one: a. lapse of time. b. performance. c. agreement. d. withdrawal of authority.
d. withdrawal of authority
Jack works for Insuranceforyou, an insurance intermediary that is an agent of an insurer, ASR. Although not a deliberate act, Jack wrongly explains the cover provided under an insurance contract to a client. Who would ultimately be liable for his actions, if anyone? Select one: a. ASR. b. No one. c. Jack. d. Insuranceforyou.
a. ASR.
A client, when dealing with an agent of an insurer, will not know the precise limits of the agent's authority. The insurer will normally be bound by the actions of the agent, even if these are beyond their authority, under what is known as: Select one: a. usual authority. b. express authority. c. ostensible authority. d. implied authority.
c. ostensible authority
An agent owes a duty of good faith to a principal. This applies:
Select one:
a. only to matters of confidentiality.
b. only to matters of disclosure.
c. to all related matters that might affect the principal whilst they act as an agent.
d. only to those matters that relate to a potential conflict of risk.
c. to all related matters that might affect the principal whilst they act as an agent.
Keith and Gillian are business partners and own the business equally. The partnership turnover is £100,000, they have net profits of £60,000 and they have borrowings of £40,000. There is no agreement to buy each other out on the event of death. For how much could Gillian insure the life of Keith? Select one: a. £50,000. b. £20,000. c. £30,000. d. £40,000
B.£20,000
An insurer has issued marketing material and a quotation to Laura for insurance. She decides to take out the insurance and sends a completed proposal to her insurance broker. The insurer then write to confirm cover is in force. When has an offer been made?
Select one:
a. When the broker forwarded the proposal on to the insurer.
b. With the completion of the proposal form by Laura.
c. When the marketing material was issued by the insurer.
d. When the confirmation of cover was sent by the insurer.
b. With the completion of the proposal form by Laura.
When there is no insurable interest, an insurance contract:
Select one:
a. would be regarded as illegal and hence the insurer must return any premiums paid.
b. is void and the insurer would refund any premiums paid.
c. would be regarded as illegal and hence the ‘policyholder’ would have no right to a return of any premiums.
d. is void but the insurer could retain any premiums based on the period they believed they were on risk.
b. is void and the insurer would refund any premiums paid.
Helen is arranging life insurance on her own life. Under common law, she should be aware that:
Select one:
a. she would need to demonstrate that a financial interest is present.
b. any sum assured is restricted to any debts she has.
c. she has an unlimited insurable interest in her own life.
d. she must be able to financially demonstrate the reasonableness of the sum assured.
c. she has an unlimited insurable interest in her own life.
A claim on a business insurance policy has revealed that there was a deliberate qualifying breach by the insured when originally presented to the insurer. The insurer is most likely to:
Select one:
a. avoid the policy and refuse to refund the premiums paid.
b. avoid the policy and return the premiums paid.
c. ignore the breach and allow the policy to continue.
d. refuse the claim but allow the policy to continue.
a. avoid the policy and refuse to refund the premiums paid.
When considering the FCA’s Insurance: Conduct of Business [ICOBS] rules:
Select one:
a. consumers are not covered under ICOBS.
b. commercial customers are not covered under ICOBS.
c. they have no force of law.
d. consumers are given more protection than commercial customers.
d. consumers are given more protection than commercial customers.
A claim on a private motor insurance policy has shown that there was a misrepresentation at the outset by the insured. If the insurer wanted to take action to remedy this, what must it demonstrate under the Consumer Insurance [Disclosure and Representations] Act 2012?
Select one:
a. The insured had deliberately acted fraudulently only.
b. The insured failed to exercise reasonable care only.
c. The insured had deliberately acted fraudulently and without misrepresentation, it would not have offered the same terms.
d. The insured failed to exercise reasonable care and, without misrepresentation, it would not have offered the same terms.
d. The insured failed to exercise reasonable care and, without misrepresentation, it would not have offered the same terms.
An insurer has received a burglary claim for £20,000. If it transpires that £16,000 of this was genuine and £4,000 is fraudulent, what action is the insurer most likely to take?
Select one:
a. It will repudiate the whole claim and avoid the policy ‘ab initio’.
b. It will settle for £16,000 and avoid the policy ‘ab initio’.
c. It will repudiate the whole claim and terminate the policy.
d. It will settle for £16,000 and terminate the policy.
c. It will repudiate the whole claim and terminate the policy.
The Consumer Insurance [Disclosure and Representations] Act 2012 introduced a duty with consumer insurance for:
Select one:
a. proposers to disclose all facts a ‘prudent underwriter’ would deem material.
b. insurers to fully disclose all relevant details of the cover to be provided.
c. insurers to treat all their customers fairly.
d. proposers to take reasonable care not to make a misrepresentation when applying for insurance.
d. proposers to take reasonable care not to make a misrepresentation when applying for insurance.
Under the Insurance Act 2015, a company wishing to effect an insurance contract is required to disclose anything:
Select one:
a. known by the insured’s senior management.
b. which diminishes the risk to insurers.
c. to which the insurer waives information.
d. which is common public knowledge.
a. known by the insured’s senior management.
Which scenario is most likely to be regarded as an example of a consumer insurance contract?
Select one:
a. Fiona, who has arranged employers’ liability insurance for her business.
b. Steve, who has insured the contents of his office.
c. Susie, who has insured her delivery van.
d. Yasser, who has insured his vintage motorcycle. Correct
d. Yasser, who has insured his vintage motorcycle. Correct
An insured owes a positive duty to the insurer to disclose facts when applying for insurance. This is because:
Select one:
a. under the Unfair Contract Terms Act 1977, there is a duty to do so.
b. the insured will always be in possession of the full facts.
c. under the Sale of Goods Act 1979, there is a duty to do so.
d. the insurer often has to rely solely on the information provided by the insured
d. the insurer often has to rely solely on the information provided by the insured
Misrepresentation would NOT generally include:
Select one:
a. a point of fact.
b. something that the other party relied upon when entering the contract.
c. an opinion.
d. something material to the contract.
c. an opinion.
Jenny has applied for a contents insurance policy which includes some specified items of high value. Richard, her husband, is joint owner of the property and has an unspent previous criminal conviction for car theft which Jenny deliberately did not disclose. If this came to light, the insurer is most likely to:
Select one:
a. ignore Richard’s conviction as it is unconnected to the contents insurance.
b. ignore Richard’s conviction as it was Jenny that applied for the insurance.
c. regard this as fraudulent misrepresentation but it would have to be directly related in some way to the nature of any claim for the insurer to consider taking action.
d. regard this as fraudulent misrepresentation as Jenny had failed to disclose a moral hazard that she was aware of.
d. regard this as fraudulent misrepresentation as Jenny had failed to disclose a moral hazard that she was aware of.
With insurance contracts, a warranty is generally regarded as:
Select one:
a. a promise made by the insurer relating to the performance of the contract.
b. a promise made by the insured relating to facts or to something which they agree to do.
c. a promise by the insurer to act fairly.
d. another name for a feature or condition of the policy.
b. a promise made by the insured relating to facts or to something which they agree to do
With a composite insurance policy:
Select one:
a. a breach by one party will cause the whole policy to fail.
b. in determining a breach or otherwise, the courts will ignore the interests of each insured person.
c. a breach by one party might invalidate their cover without impacting on the interests of others.
d. in determining a breach or otherwise, the courts will hold each party to have an equal interest.
c. a breach by one party might invalidate their cover without impacting on the interests of others.
Under the warranties in its insurance policy, a shop must keep any cash left on the premises overnight in a safe. This is an example of a[n]: Select one: a. express warranty. b. implied warranty. c. exact warranty. d. waiver of breach warranty.
a. express warranty.
What current UK legislation provides some statutory control over insurance policy wording?
Select one:
a. The Consumer Rights Act 2015.
b. The Unfair Contract Terms Act 1977.
c. The Unfair Terms in Consumer Contracts Regulations 1999.
d. The Financial Services and Markets Act 2000.
a. The Consumer Rights Act 2015.
An estranged spouse has wilfully set fire to jointly owned property as an act of revenge. There was a joint insurance policy on the property. What is the position in law and how, if at all, might the Financial Ombudsman treat it differently?
Select one:
a. In law, the innocent party might be entitled to their share. The Ombudsman has always rejected this interpretation.
b. In law, they are jointly liable although the Ombudsman has previously found in favour of the innocent party.
c. In law, the innocent party will always be entitled to their share and the Ombudsman has previously supported this.
d. In law, they are held jointly liable and so the claim is refused. The Ombudsman has previously accepted this.
b. In law, they are jointly liable although the Ombudsman has previously found in favour of the innocent party.
A motor insurance policy includes a warranty that the insured car should be kept in a garage overnight. If the car is routinely parked on the road instead, this is legally known as a[n]:
Select one:
a. breach of pre-contractual information duties.
b. misrepresentation.
c. breach of contract.
d. implied warranty.
c. breach of contract.
To avoid a claim on a consumer insurance policy, an insurer must be able to demonstrate that:
Select one:
a. there is only evidence that a breach in warranty or condition has taken place.
b. fraud has been committed or there has been some form of breach in warranty or policy condition.
c. there is evidence of fraud or there has been a breach of a warranty or condition that was directly connected to the claim.
d. there is only evidence of fraud.
c. there is evidence of fraud or there has been a breach of a warranty or condition that was directly connected to the claim.
If wording used within an insurance contract had more than one meaning, courts will generally:
Select one:
a. make a ruling specific to the case, based on the facts.
b. give the insured the benefit of the doubt.
c. find in favour of the insurer that drafted the contract.
d. allow the parties to go to arbitration to resolve the issue.
b. give the insured the benefit of the doubt.
A commercial insurance policy requires the insured to notify the insurer of an incident that falls under the policy within 7 days. If this collateral condition was not met and there was a claim, the insurer is most likely to:
Select one:
a. pay the claim but then void the contract.
b. refuse the claim and cancel the policy from the date it became aware of the breach.
c. pay the claim but it could charge for any additional expense incurred resulting from this.
d. refuse the claim and cancel the policy from outset.
c. pay the claim but it could charge for any additional expense incurred resulting from this.
The wording used in insurance policies must have a clear meaning, but what is the position with commonly used words such as ‘storm’ and ‘fire’?
Select one:
a. Their technical meaning has been confirmed in legal protocols which are accepted by all insurers.
b. There is no generally accepted definition and each case will be viewed on its own merits.
c. Their meaning has been established under the doctrine of precedent by previous court decisions.
d. Their meaning has been confirmed in previous statutes.
c. Their meaning has been established under the doctrine of precedent by previous court decisions.
If an insurer has rejected a claim on the basis of the ‘fraudulent device’ defence, this means that the insured:
Select one:
a. made a claim when they have suffered no loss.
b. exaggerated the amount of loss.
c. made fraudulent statements that increased the chances of the claim being paid out.
d. deliberately caused the loss in order to bring a claim.
c. made fraudulent statements that increased the chances of the claim being paid out.
Seb had a personal accident policy. He fell whilst riding and suffered injuries. Whilst waiting to be rescued, he contracted pneumonia of which he died two weeks later. Under the doctrine of proximate cause, what is the most likely court ruling and why?
Select one:
a. Seb would be covered by the policy because an insured event, the accident, had clearly occurred.
b. Seb would be covered by the policy because there is an unbroken chain of events.
c. Seb would not be covered by the policy because the cause of death was not an insured event.
d. Seb would be not covered by the policy because there is not a clear and unbroken chain of events.
b. Seb would be covered by the policy because there is an unbroken chain of events.
What rights, if any, does an equitable assignee have in relation to an insurance contract?
Select one:
a. They may benefit from a claim made in their own name.
b. A claim cannot be made without the agreement of the assignee.
c. They may benefit from a claim made by the assignor.
d. They have no rights.
c. They may benefit from a claim made by the assignor
What is the burden of proof that must be met for an insurance claim to be paid, and on whom does it fall?
Select one:
a. The insured has to prove the claim on the balance of probabilities.
b. The insurer must prove absolutely that the claim is not covered under the policy.
c. The insured has to prove the claim beyond reasonable doubt.
d. The insurer must prove that there are reasonable grounds to decline a claim.
a. The insured has to prove the claim on the balance of probabilities.
The principle of ‘indemnity’ states that:
Select one:
a. a claim should be as a direct result of a peril that the policy insures.
b. only those with a legitimate interest in the policy may claim against it.
c. the amount paid under an insurance policy will always be subject to a maximum amount.
d. an insured may be compensated for their loss but should not profit from it.
d. an insured may be compensated for their loss but should not profit from it.
Under the Married Women’s Property Act 1882, who would be able to benefit under the life policy? Select one: a. The insured's children. b. A business partner. c. A bank. d. A brother-in-law.
a. The insured’s children.
Under the Insurance Act 2015, what action will an insurer take with a fraudulent claim?
Select one:
a. The insurer is liable to pay the claim and any subsequent claims for the remainder of the policy term.
b. The insurer is liable to pay the claim but not any costs associated with it.
c. The insurer is not liable to pay the claim, it may recover any costs associated with it, and terminate the policy from the time of the fraudulent act.
d. The insurer is not liable to pay the claim and because it can cancel the policy from outset, it may also recover any costs associated with it.
c. The insurer is not liable to pay the claim, it may recover any costs associated with it, and terminate the policy from the time of the fraudulent act.
With which type of insurance would an insurer NOT be able to decline a legitimate claim on the basis that it was notified outside a stipulated period? Select one: a. Contents insurance. b. Marine insurance. c. Property insurance. d. Employers' liability insurance.
d. Employers’ liability insurance.
Amelia has had a total loss on her insurance and her property has been rebuilt. What would the position be with her insurance policy?
Select one:
a. Her existing policy would continue without any requirement to pay additional premiums.
b. Her existing policy would continue with a requirement to pay additional premiums.
c. A new insurance contract must be arranged but without a requirement to pay additional premiums.
d. A new insurance contract must be arranged along with a further premium.
d. A new insurance contract must be arranged along with a further premium.
A garden wall, which showed signs of deterioration, is blown down in a storm. What action is the insurer most likely to take?
Select one:
a. Meet the full cost of rebuilding the wall.
b. Meet a set percentage of the rebuilding costs as laid out in the policy document.
c. Decline the claim as the wall was in a poor state.
d. Meet the full costs of rebuilding the wall less an amount for betterment.
d. Meet the full costs of rebuilding the wall less an amount for betterment.
Aisha has insured property that she purchased second hand for £800. If she had bought it new, the property would have been worth £1,500. At the time of a claim, it was worth £300. Under the principle of 'indemnity', what would be the value of her claim? Select one: a. £700. b. £300. c. £800. d. £1,500.
b. £300.
An insurance policy is subject to a franchise of £500; premiums of £300 have been paid. If there is a valid claim of £1,200, how much would the insurer pay? Select one: a. £700. b. £1,200. c. £200. d. £500
b. £1,200.
What is an example of contingency insurance? Select one: a. Property insurance. b. Motor insurance. c. Life insurance. d. Liability insurance.
c. Life insurance.
If a claim is settled on a ‘new for old’ policy by payment of money, the insured:
Select one:
a. is able to spend the money as they please.
b. can use the money to reinstate the property or it will otherwise be settled on an ordinary indemnity basis.
c. is required to use the money to make good the loss.
d. is required to use the money to reinstate the property
b. can use the money to reinstate the property or it will otherwise be settled on an ordinary indemnity basis.
Max has made a claim under his insurance policy. In the absence of a clause stating how the claim will be settled in the policy, he has the right to insist on: Select one: a. repair. b. replacement. c. payment of money. d. reinstatement.
c. payment of money.
The principle of ‘indemnity’ is best described as financial compensation:
Select one:
a. which, under statute, must cover at least the amount of the policy cover.
b. when it is clear that a loss has been incurred.
c. that puts the insured back to the position they enjoyed before a loss.
d. which will always match the amount of the loss.
c. that puts the insured back to the position they enjoyed before a loss.
A ship has run aground and been badly damaged. If it cannot subsequently be recovered, the term used to describe the ship owner giving over the ship to the insurer is legally known as: Select one: a. salvage. b. constructive total loss. c. writing it off. d. abandonment.
d. abandonment.
Which court deals with most minor civil cases
County Courts
Where are the major civil cases (usually involving claims for substantial amounts of money) heard
High Court
What is the Golden Rule?
Where the meaning of words (if strictly applied) would be absolutely absurd and the courts can chose another meaning
What is the Mischief Rule?
The judge will consider the meaning of the words and determine if the wording is correct and choses the interpretation which makes the act effective in suppressing the mischief
Where are most minor criminal offences dealt with?
Magistrates Court
Where are more serious Criminal Offences dealt with?
Crown Court
A Civil decision made in the Court of Appeal is binding on what other courts?
The lower courts
- High Court
- County Court
The are also bound by their own decisions
What two things are a principle of indemnity which effectively prevents the insured from ‘making a profit from the loss’
Subrogation
Contribution
What is concerned with sharing the losses between insurers when double insurance exists?
Contribution
What is an escape clause?
It effectively forbids the insured from taking out another policy without the consent of the insurers
What are the general defences in tort:
Self defence necessity statutory authority consent volenti (someone willing placing themselves in harm) contributory negligence
Tresspass is actionable per se and requires
Direct act by defendant
Intentional act by defendant
What are the two types of victims for negligence?
Primary and Secondary
Under negligence what do primary victims suffer from
Fear for their own safety
Under negligence what do second victims suffer from
fear for the safety of others( hillsborough)
What is vicarious liability?
Where one person is held liable for wrongs committed by another (usually employer/ employees)
Liability for defective products is strict under what act?
Consumer Protection Act
Assignments of insurance contracts can occur in what three ways?
- Assignment of the subject matter
- assignment of the benefit of the contract
- assignment of the contract itself
When does an insurance contract come into existence?
When the offer made by one party is unconditionally accepted by the other
Why does the law require insurable interest?
to reduce moral hazard
discourage wagering
Under business insurance, the duty to make a fair presentation of the risk imposes the following on the parties of the insurance contract:
- a duty not to misrpresent any matter relating to the loss
- a duty to disclose all material facts
What is a material fact defined as?
what a prudent underwriter would deem material
