CONTRACT LAW REVIEW NOTES
INSURANCE CONTRACT
Is a contract whereby the insurer, in return for a sum of money called
premium, contracts with the insurer to pay a specified sum on the
happening of a specific event e.g death or accident,or to identifying the
insured against any loss caused by the risk insured against e.g fire.
TERMS USED IN
INSURANCE INSURER:
The party that promises to pay money to or indemnify the other party
upon the occurrence of some specified event is called the insurer.
In maritime insurance contracts, the insurer is called the underwriter.
INSURED OR ASSURED:
The person to whom under a contract of insurance will receive money or
identity upon the occurrence of some specified event is called the or
assured person/policy holder.
Insurance policy:
The terms of a contract of insurance are usually written down in a
document known as the insurance policy.
The policy is stamped and signed by the insurer and handed over to the
insured. The policy is evidence of the fact of insurance.
Premium:
,The consideration payable by the insured person to the insurer is called
premium. The premium may be fixed amount or may vary (increase or
decrease)according to circumstances agreed upon.
The time of payment depends upon agreement;payment may be made
monthly, quarterly or annually or by a single himpsum.
FORMATION OF THE CONTRACT
, A contract of insurance must fulfill all the essential requirements of a
contract as laid down in the law of contract.
To be enforceable agreement, a contract of insurance must contain the
following essential elements of a contract:
➢ Offer and acceptance
➢ Consideration
➢ Legal purpose
➢ Competent parties
➢ Legal form
THE OFFER
Since the contract of insurance is constited by acceptance of an offer,it is
necessary in the first instance to make certain that an offer has infact been
made which is capable of being accepted.
WHO MAKES THE INSURER OFFER?
The offer to enter into a contract of insurance may ,as a general rule,be
considered as addressed to the insurer by the person who is seeking to
protect himself by insurance against loss.
The offer proceeds from the proposed assurance when he has filled up hthe
proposal form and forwarded it to the insurers.
The term of an ordinary contract of insurance are not specially arranged
between the parties;the insurers have their own upon which they are
prepared to contract and from which ,as a rule,they are not willing to
depart.
Ther is no real negotiation between the parties,the assured being
INSURANCE CONTRACT
Is a contract whereby the insurer, in return for a sum of money called
premium, contracts with the insurer to pay a specified sum on the
happening of a specific event e.g death or accident,or to identifying the
insured against any loss caused by the risk insured against e.g fire.
TERMS USED IN
INSURANCE INSURER:
The party that promises to pay money to or indemnify the other party
upon the occurrence of some specified event is called the insurer.
In maritime insurance contracts, the insurer is called the underwriter.
INSURED OR ASSURED:
The person to whom under a contract of insurance will receive money or
identity upon the occurrence of some specified event is called the or
assured person/policy holder.
Insurance policy:
The terms of a contract of insurance are usually written down in a
document known as the insurance policy.
The policy is stamped and signed by the insurer and handed over to the
insured. The policy is evidence of the fact of insurance.
Premium:
,The consideration payable by the insured person to the insurer is called
premium. The premium may be fixed amount or may vary (increase or
decrease)according to circumstances agreed upon.
The time of payment depends upon agreement;payment may be made
monthly, quarterly or annually or by a single himpsum.
FORMATION OF THE CONTRACT
, A contract of insurance must fulfill all the essential requirements of a
contract as laid down in the law of contract.
To be enforceable agreement, a contract of insurance must contain the
following essential elements of a contract:
➢ Offer and acceptance
➢ Consideration
➢ Legal purpose
➢ Competent parties
➢ Legal form
THE OFFER
Since the contract of insurance is constited by acceptance of an offer,it is
necessary in the first instance to make certain that an offer has infact been
made which is capable of being accepted.
WHO MAKES THE INSURER OFFER?
The offer to enter into a contract of insurance may ,as a general rule,be
considered as addressed to the insurer by the person who is seeking to
protect himself by insurance against loss.
The offer proceeds from the proposed assurance when he has filled up hthe
proposal form and forwarded it to the insurers.
The term of an ordinary contract of insurance are not specially arranged
between the parties;the insurers have their own upon which they are
prepared to contract and from which ,as a rule,they are not willing to
depart.
Ther is no real negotiation between the parties,the assured being
