Insurance Contracts and the Law Flashcards
Under which category of law does insurance fall into?
Civil Law
Define ‘‘law’’ ?
Law is a body of rules of action or conduct prescribed by controlling authority and having a binding legal force.
Briefly describe the Civil Code.
It is a system of Law used in Quebec that governs persons, relations between persons and property. The Code is referred to first under the Civil Law. Previous decisions are referred to for interpretation.
Briefly describe the Common Law system.
It is a system of Law used in the provinces other than Quebec that is flexible and adaptable to changing circumstances when precedent may no longer be considered legally, socially or equitably valid.
What is the role of Statue Law?
It clarifies matters of civil liability and takes priority over existing law ion all of the provinces.
Discuss Tort Law. Include the elements of a tort action and the two major types of torts.
Tort Law deals with civil wrongs, other than a breach contract for which the court will provide a remedy in the form of an action for damages.
Elements:
1. Existence of legal duty from defendant to plaintiff.
2. Breach of duty, and
3. Damages as proximate result.
Major types of torts:
1. Intentional Torts
2. Unintentional Torts
Define the term ‘‘contract’’.
A contract is an agreement between two or more persons, which creates an obligation to do, or not do, a particular thing.
What are the 5 elements of a contract? Explain each.
- Agreement - All parties to the contract must agree with and accept the subject matter and terms of the contract.
- Consideration - Where something of value is exchanged for a promise or for performance. Under contract law, there is no contract if there is no consideration.
- Legality of Object - A contract intended for a purpose that is contrary to the public good - a contract for illegal purposes - is not enforceable at law.
- Legal Capacities of the Parties to Contract - For a contract to be enforceable, all parties must be capable of understanding and accepting of the terms of the contract. They must have a clear understanding of th offer and be capable of accepting it.
- Genuine Intention - Acceptance of a contract must be freely given. A contract is enforceable only where it can be shown it was the ‘genuine intention’ of the parties to enter into a legally enforceable contract.
What are the three elements unique to an insurance contract?
- Insureable Interest
- Utmost Good Faith
- Indemnity
Give examples of people with insurable interest.
-Owners of property.
-Mortgagee
-Bailees to whom property is entrusted for repair, service or safekeeping.
What are the differences between void an voidable contract?
Void contract is to considered to never have existed as to the Voidable contract it can be accepted or made void at the option of the innocent party.
Must contracts be in writing to be in binding?
Oral contracts are just as binding as written ones. However, it is important to put details in writing as soon as possible to avoid any disagreement between the insured and the insurer.
What is the importance of endorsements?
Endorsements overrule any wording in the policy which is inconsistent with the endorsement.
Why is it that important that a broker understand the limitation of the binding authority in the Agency Agreement?
To avoid results becoming an errors and omission claim.
What are the two branches of Civil Law?
Tort Law and Contract Law
