Unit 3

Question 1

CALC - essential element required to form any contract

Answer 1

• Competent parties (at least 18 and deemed sane and sober)
• Agreement (offer and acceptance)
• Lawful objective
• Consideration (an exchange of value between parties to a contract)

Question 2

Contract of adheasion

Answer 2

all parties agree to adhere to the entire contract as a while. When ambiguitues arise, the court will rule in the favor of the insured

Question 3

Aleatory contract

Answer 3

the values exchanged are NOT equal

Question 4

Unilateral contract

Answer 4

only one party makes a legally enforcable promise

Question 5

conditional contract

Answer 5

the contract may be voided if all policy conditions are not met

Question 6

Personal contract

Answer 6

the insured may NOT transfer rights and duties under the contract without the insurer’s written permission

Question 7

Warranties

Answer 7

written promise in the policy that the insured will do (or not do) something.