SECTION 2: Contract Law

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Author:
sirinvictus
ID:
305577
Filename:
SECTION 2: Contract Law
Updated:
2015-07-22 23:07:25
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contract law
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Description:
Contract Law
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  1. U.S. Judicial System
    2 Divisions

    • Criminal Court
    • Civil Court

    Insurance deals with CIVIL COURT for legal liability from a private wrong

    Remedy is compensation for damages; civil fine
  2. Four(4) Elements of a Legal Contract
    1.Legal Purpose- not against public interest

    2.Competent Parties- at the time of the application. Minors,legally insane, or intoxicated are NOT competent.

    3.Agreement- Required BOTH offer and acceptance

    offer- made when the applicant completes the application 

    Acceptance -
    made when insurance policy is issued


    4.Consideration (aka Trade of Value)- something of value BOTH parties must give.

    • Insurer's = Promise
    • Considerations made by the applicant for the insurance are: 1) truthful statements AND 2) Premium

    ***INCOMPLETE APPLICATION IS NO INSURANCE COVERAGE***
  3. Contract of Adhesion
    "Take it or Leave It"

    The insured must "adhere" to the contact terms without negotiation

    ambiguity in favor of the insured
  4. Aleatory Contact
    Equal value is not given by both parties. One party can benefit more than the other based on chance (or occurrence of the uncertain event).
  5. Material Fact
    Impacts the insurer's decision to accept or reject the offer

    Material Fact: age, health, high blood pressure, cancer, heart attack

    NOT a material fact: cold flu
  6. Representations
    Written statements regarding material facts that the applicant believes to be true.

    Misrepresentation: A false statement

    Concealment: Intentional failure to disclose a material fact
  7. Fraud
    A knowing mispresentation of truth or concealment of a material fact

    Felony punishable by: 

    • up to $10,000
    • up to 10 years in prison
    • Combination of both

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