Chapter 4 Flashcards
What are the 5 main elements of Common Law Contracts
Agreement
Consideration
Capacity
Genuine Intention
Legality
What is a contract agreement?
Meeting of the minds, definite offer with acceptance. Cannot be withdrawn and has provisions of terminations. All terms of contract.
What is a void contract
A contract is one that is treated as if it NEVER existed.
Reasons:
Mistake of person, identity, person made by a mistake.
Consideration
Price or Service
Item must have value
Present or future
Legal capacity to Contract
Parties must be legally able to enter contract.
No minors, mentally incapacitated or intoxicated.
Genuine intention
Both parties need to agree and have a genuine intention.
Legality of purpose
Can not be:
Forbidden by law
Against public policy
Committing a crime.
Valid Contracts in Quebec
Four requirements forming a binding contract
Consent - agreement and genuine intent in 1
Capacity - legal age
Cause - consideration
Object of contract- not forbidden by law
All Cs
Same but different names.
Lesion
In Quebec it’s when a minor enters into a contract. Avoiding a contract.
In Quebec - null a contract
Common law - Void contracts.
Bailee
In contract and property law, one to whom goods or property are entrusted for a stated purpose.
Contract
Is a deliberate engagement enforceable by law.
Has all the legal requirements as well as the three unique features.
Eg - in MB 5 conditions plus 3 features.
3 insurance features for a contract
Insurance interest
Indemnity
Utmost good faith
Parties involved in the insurance contract
Insured - first part (driver)
Insurer - second party (MPI)
Third party - not part of the contract t but involved. Other vehicle.
Insurance Interest
Property - owners, auto house company, mortgagee, tenant
Liability - bodily injury property or death
Life and Health- you life, spouse, dependents, employees.
Indemnity- no more no less money.
But there are deductibles.
Coinsurance
A distinct section in the policy that requires the insured to carry extra insurance for a specific amount for a full refund.
Actual Cash Value
The fair market value. Includes depreciation. Fair market value, cost to repair.
Replacement cost
The current market value of the cost to replace the lost or damaged property.
TVs are replaced at replacement costs.
Depreciation
The reduction in value of property through use, aging, deterioration or obsolescence
Capped Replacement Cost
Insurance companies will offer replacement costs up to a certain percentage.
Commercial properties.
Valued Policy
Alternative method for coming up with the method.
Eg jewelry, artwork. Get an appraisal.
Salvage
Remaining value of property after sever damage. Damaged items that have some value left in it.
Subrogation
Legal process by which an insurance company after the payment of a loss has the right to
Recoup some of the costs.
Contribution
When more than one insurance company shares the cost of the loss.
Eg - oil rig. Multiple insurance companies
Utmost Good Faith
The applicant and the insurer must be 100% honest. Highest level of integrity.
Uberrimae Fidel
Utmost good faith
Misrepresentation
Incorrect or missing information about a material fact.
Eg. Saying you had 1 speeding ticket but you really had 3.
Non disclosure
The applicant fails to disclose material fact.
Eg. Said only has electricity but didn’t mention wood stove.
Concealment
Same as non disclosure.
Withholding of information pertinent to a risk.
What concept upholds the principle of indemnity?
Subrogation
Explain the role of indemnity in insurance contracts,
Return to their pre loss financial position
Collect only the amount of loss
Amount of indemnity depends on policy wording
Calculating indemnity amount
Negotiations between the parties in the contract
Indemnity is reinforced by three associated principles.
