Chapter 3 - Contract & Agency Flashcards
There are three ways in which the relationship of the principle and agent can arise. Which is NOT one of these?
- Consent
- Necessity
- Negotiation
- Ratification
- Negotiation
A valid contract MUST include:
- Signed documentation
- A written offer
- A legal disclaimer
- Consideration
- Consideration
Sanjeev requires house insurance. He has spoken to an insurer over the telephone who has offered him a policy with an excess of £500. Sanjeev excepts the policy but requests an excess of £250. In contract terms, Sanjeev’s acceptance represents:
- A counter-offer
- An offer
- Unconditional acceptance
- Agreement
- A counter-offer
Katie is selling her car for £2000. May offers her £1800, which Katie refuses. Legally, a contract has not been formed between Katie and May because:
- Katies refusal of the counter-offer acts as a withdrawal of the original offer.
- Katie and May did not sign a contract.
- May’s counter-offer acts as a rejection of the original offer.
- May offered less than Katie was prepared to accept
- May’s counter offer acts as a rejection of the original offer
Colin boys home contents insurance, having received a quote through the post which is happy with. Acceptance of the will be complete when:
- A letter of acceptance has received.
- A letter of acceptance is posted.
- The policy is put on risk
- Colin receives confirmation from the insurer.
- A letter of acceptance as posted
Within insurance, consideration will typically be the:
- Value of the claim paid by the insurer
- Disclosure of all relevant facts at the outset by the insured
- Initial terms of the insurance issued by the insurer
- Premium paid by the insured
- Premium paid by the insured
Joe and Maggie have been told that their insurance policy doesn’t have a right to cancel. What type of policy is it?
- Travel insurance with a term of less than a month.
- Motor insurance with a term of less than a month.
- Payment protection insurance
- Critical illness insurance payment
- Travel insurance with a term of less than a month
Tolu has building insurance but has not adhered to a warranty on the policy. In the event of a claim, the insurer would:
- Be able to avoid the claim and cancel the policy from the outset.
- Be liable, but would be able to only pay a set proportion of the claim.
- Not to be liable for claims resulting from this, but will be liable for losses occurring after a breach has been remedied.
- Be able to make a discretionary payment of an amount it feels is reasonable
Not to be liable for claims resulting from this, but will be liable for losses occurring after a breach has been remedied.
If an independent intermediary completes a property survey for an insurer, they would be considered to be a(n):
- Principal for the insurer.
- Principal for the property owner.
- Agent for the property owner.
- Agent for the insurer.
Agent for the insurer
Firedale Insurance Ltd has asked one of his agents to carry out a property survey 50 miles away. Agent carries out the survey and charges the mileage cost back to the insurer. The costs will be met because:
- The agent has implied authority.
- Agency agreement always allow for mileage costs.
- The agent has limited authority.
- The principal is always liable for the actions of the agent.
The agent has implied authority
All agency agreement should :
- Set out the requirements and responsibilities for just the agent.
- Define an allocate the responsibilities and rights of each party.
- Set out the requirements and responsibilities for just the principal.
- Set out the broad principles and conduct requirements that each party will be subject to.
Define an allocate the responsibilities and rights of each party
