The Insurance Contract

Question 1

General requirements for a valid insurance contract

Answer 1

Consensus, contractual capacity, legality, performance (physical possibility), formalities.

● Consensus: Both parties must have intention of concluding the insurance contract, and they will be bound by the obligations in terms of the contract.

● Contractual capacity: Ability of the parties to enter into a valid contract. This can be affected by a number of factors, including age and mental capabilities.

● Legality: The contract may not be contrary to the common law or any statutory rule of law.

● Physical ability/ performance: Parties must be capable of delivery in terms of the contract, and formalities must be complied with if required by the law or if the parties agree to certain formalities.

● Formalities: There are no formalities in insurance contracts, but the parties may prescribe their own formalities should they wish to do so.