chapter 3 Flashcards
means the contract is made null and void.
recission
potential for unequal exchange of value or consideration for both parties.
aleatory
pays a stated sum regardless of the actual loss incurred.
valued contract
pays an amount equal to the loss.
indemnity contact
written contract in which one party promises to indemnify another against loss that arises from an unknown event.
policy
contract has been prepared by one party (the insurance company) with no negotiation between the applicant and the insurer.
adhesion
This means that only one party (the insurer) makes any kind of enforceable promise.
unilateral
insurer’s promise to pay benefits depend on the occurrence of an event covered by the contract.
conditional
statement made by the applicant that is guaranteed to be true in every respect.
warrenty
statement made by the applicant that they consider to be true and accurate to the best of the applicant’s belief.
representation
failure or neglect by the applicant to disclose a known material fact when applying for insurance.
concealment
authority a principal deliberately gives to its agent.
express authority
unwritten authority that is not expressly granted, but which the agent is assumed to have in order to transact the business of the principal.
implied authority
appearance or assumption of authority based on the actions, words, or deeds of the principal.
apparent authority
voluntary giving up of a legal, given right.
waiver
failure to act in a reasonable or prudent manner.
simple negligence
reckless disregard for the need to act in a reasonable manner regardless of the potential for harm.
gross negligence
