C5 - B Flashcards
What are the two key pieces of insurance law affecting the London Market?
Consumer Rights Act 2015
Contracts (Rights of Third Parties) Act 1999
What does the Consumer Rights Act 2015 require regarding terms in consumer contracts?
Terms and notices must be fair
What is the definition of an ‘unfair term’ under the Consumer Rights Act 2015?
A term that causes a significant imbalance in the parties’ rights and obligations to the detriment of the consumer
What factors are considered when determining if a term is unfair?
Subject matter of the contract, circumstances at agreement time, other terms of the contract, other dependent contracts
To avoid being classified as unfair, a term should be _______.
[transparent and prominent, expressed in plain and intelligible language, legible]
Provide an example of a potentially unfair term listed in the schedule to the Consumer Rights Act 2015.
Terms that make traders’ commitments subject to compliance with a particular formality
What do the majority of commercial contracts contain regarding claims?
Very strict claims reporting requirements
What is the legal term used for the principle that only parties to a contract can enforce its terms?
Privity of contract
What does the Contracts (Rights of Third Parties) Act 1999 reform?
The privity rule
even if a contract is made with the purpose of benefiting someone who is not
a party to it, that person (the ‘third party’) has no right to sue for breach of contract.
Under what circumstances can a third party enforce a term of a contract according to the 1999 Act?
Either the contract must make express provision for the enforcement, or the third party must be expressly identified by name, class or description
What remedies are generally allowed under the Contracts (Rights of Third Parties) Act 1999?
- Damages
- Injunction
- Specific performance
What is an injunction?
A remedy that the court can award which is an order to prevent a party from doing something
What is an order for specific performance?
A court order that requires a party to perform a particular act, such as complying with a contract they attempted to breach
Do insurers generally want to extend their liability under the Contracts (Rights of Third Parties) Act 1999?
No
What is the status of cargo insurance under the Contracts (Rights of Third Parties) Act 1999?
Cargo insurance is freely assignable
What must an insurer see to process a claim from a party not privy to the original insurance contract?
The chain of sales of both goods and the associated insurance policy leading back to the original insured
Fill in the blank: The Contracts (Rights of Third Parties) Act 1999 Exclusion Clause states that no third party may ______ any term of this insurance or of any certificate issued hereunder.
enforce
True or False: The Contracts (Rights of Third Parties) Act 1999 allows third parties to benefit from an insurance policy.
False
What is the main purpose of the Contracts (Rights of Third Parties) Act 1999?
To allow certain third parties to enforce terms of a contract under specified conditions
What happens if a third party is not identified in the contract?
That third party has no right to sue for breach of contract
