General Principles Ch 10 Flashcards
Business Law / Consumer Protection Laws
Enforceable agreements between two or more parties
Contracts
Certain elements must apply for a contract to be legally enforceable:
An agreement preceded by ___________________.
Something of value must be exchanged in _____________ of the object of the contract.
The principal must have ______________ to execute contracts.
The contract must be for a ______________.
an offer and an acceptance
consideration
legal capacity
lawful purpose
Incompetent or intoxicated adults have _______________ capacity to execute contracts.
limited or no
Minors have capacity to contract for ________________ only.
Necessities (e.g. food, clothing, shelter)
Courts _________ enforce a contract that asks either or both parties to do something illegal.
will not
A __________ contract was never valid. It is not enforceable because it lacks one or more of the necessary elements.
VOID
A _________ contract is where one party has the option of voiding the contract if desired while the other party is bound by the contract.
VOIDABLE
Where one of the parties to a contract is legally incompetent because of age, illness, or inebriation, the contract is ______ but may be ____________.
valid / voided by the incompetent party.
A legal representative of an insurance company with express, implied, or sometimes apparent authority to act on behalf of the insurer (the insurance company).
Agent
A marketing intermediary between the insurer and the policy owner who represent the policy owner rather than the insurance company.
Broker
Written, explicit direction from principal (the insurance company) to the agent.
Express authority
That which the public believes the individual has and is based on such indicators as signage, rate books, etc. Actual authority the agent has to carry out the principal’s business in accordance with general business practices.
Implied authority
arises out of the negligence of the principal allowing the agent to appear to have the authority because of certain past action of the agent.
apparent authority
Evidence of a temporary contract obliging a life insurance company to provide coverage as long as a premium accompanies an acceptable application
conditional receipt
Compliance with the rules of the insurance company (the principal) falls under the _____________.
Law of Agency