Unit Two Contracts

Question 1

What does CLOAC stand for?

Answer 1

Consider
Legal purpose
Offer
Acceptance
Competent parties

These are elements of illegal contract

Question 2

To be valid, a contract must be for a?

Answer 2

Legal purpose 

Question 3

What is aleatory?

Answer 3

Unequal value
Pay small premium, and have a large claim or pay premiums for many years without a claim 

Question 4

What is a Personal Contract?

Answer 4

Contract between the insurance company and the insured
Cannot be changed to someone else 

Question 5

Define conditional contracts

Answer 5

Insured must pay the premium for coverage and file a claim if a lost occurs

Question 6

Define indemnity

Answer 6

Pay for the loss with no gain
No more no less

Question 7

Define representation

Answer 7

Believed to be true

Question 8

Define misrepresentation

Answer 8

Information given that is not true, but would not affect the insurance companies decision

Question 9

Define material misrepresentation

Answer 9

Information given that is not true and does affect the insure decision

Question 10

Define warranty 

Answer 10

I promise

Question 11

Define concealment

Answer 11

Failure to disclose
If intentional and the information is material coverage would be voided 
If not, intentional coverage cannot be voided 

Question 12

Define fraud

Answer 12

Intentional act to cheat another

Question 13

Define waiver

Answer 13

Voluntarily giving up a right

Question 14

Define estoppel

Answer 14

Once a waiver has been created, it cannot be changed