Key Facts Q's Flashcards
What is an invitation to treat?
means that one party is willing to invite an offer
Can an offer be accepted by doing nothing?
No, an offer cannot be accepted by doing nothing
What must be agreed on within an insurance contract?
- The nature of the risk and subject matter of insurance
- Duration of the contract
- The amount of premium
How can a third party enforce a contract?
- The contract provides that they may do so
- The contract purports to confer a benefit on the third party
What law brought about change for the common law doctrine of privity of contract
Contracts (Rights of Third Parties) Act 1999
What is assignment?
A legal assignment to an insurance contract
How can ‘trusts’ claim on an insurance contract
Sometimes a person who insures is deemed to have established a trust for the benefit of a third party, who can enforce the policy. This arises frequently in the field of life insurance where a person insures their own life but does so
expressly for the benefit of another
What four laws are exempt from the privity of contract?
- Road traffics act 1988
- Third Parties Act 2010
- Law of property act 1925
- Fires prevention act 1774
How does an insured discharge the burden of proof?
- The loss was covered by an insured peril
- the amount of loss
Must be established by the insured on the balance of probabilities.
What are the ICOBS rules for handling insurers claims?
- handle claims promptly and fairly;
- provide reasonable guidance to help a policyholder make a claim and appropriate information on its progress;
- not unreasonably reject a claim (including by termination or avoiding a policy); and
- settle claims promptly once settlement has been agreed.
What are the damages for late payment by an insurer?
allows the court to award damages for
late payment where the insurer has acted unreasonably.
What is causation?
What causes a claim
What problems can arise around causation?
- In some cases it may be difficult to separate the effects of a peril which is insured (e.g. fire), from the operation of another peril which is excluded (e.g. earthquake)
- In other cases the operation of a peril that is insured (such as fire) may result in damage of a different sort (e.g. damage by smoke, or water used to put out the fire, or looters who take advantage of the chaos in order to steal).
What happens if one insured and one uninsured peril are competing?
The insured peril prevails, however it it competes with an excluded peril the excluded peril prevails
Who is the burden of proof on?
The insured
What are the four types of fraud involved in claims?
- Falsification of loss - no loss suffered
- Deliberate loss - on purpose
- Exaggeration of loss
- Lying about circumstances of a genuine loss
What is meant by the ‘fraudulent device’ defence?
fraudulent statements that increased the chances of the claim being paid out.
What is a remedy for an insurer for confirmed fraud?
- If the insured makes a fraudulent claim, the insurer is not liable to pay the claim. It may recover any sums paid in respect of the fraudulent claim and can treat the contract
as having been terminated with effect from the time of the fraudulent act
What is a contract under seal?
A contract under seal (or special contract or contract by deed) is a formal contract which is in writing and is witnessed, and which originally had to be sealed and delivered.
What are all other contracts known as?
Simple contracts
What is the difference between a unilateral contract and a bilateral contract?
A unilateral contract is only bound to one body whereas a bilateral contract is bound to both.
What is promissory estoppel?
Within contract law, promissory estoppel refers to the doctrine that a party may recover on the basis of a promise made when the party’s reliance on that promise was reasonable, and the party attempting to recover detrimentally relied on the promise.
What are the three ways a term may be implied?
- In fact
- By custom or usage
- In law
What two pieces of law contain the most restrictions on the effectiveness for exemption clause
- Unfair contract terms act 1977
- Consumer rights act 2015
What is the difference between a warranty and a condition?
- a Warranty affects only some relatively minor aspect of the agreement.
- A condition relates to an important aspect of the agreement: it goes to the root
Where do defective contracts result from?
- Illegality
- Improper pressure
- Mistake
- Misrepresentation
- Non-disclosure
How does illegality arise in an insurance contract?
- No insurable interest
- Purpose of contract is illegal
- Unlawful use of insured property
- Close connection with crime
What is improper pressure?
Improper pressure is when a person has been led into a contract forcefully
What three types of mistake are common for a defective contract?
- Mistake regarding the subject matter of the contract
- Mistake as to the identity of the other party
- Mistakes in recording agreements - rectification
