Unit 2: Contracts - Quiz Material

A guarantee that something is true is...

A Warranty

A term that describes a legal agreement between two competent parties that promises a certain performance in exchange for a certain consideration?

A contract

Allison's auto insurance policy due on the 10th of each month. Ever since she has had the policy, she has sent the premium in on the 16th of the month. The insurer has been accepting the premium this way for the past 5 years. a new CEO takes over and decides to cancel Allison's policy for a nonpayment of premium. Allison contests this decision and legally gets the policy reinstated. The decisions to reinstate the policy is an example of

estoppel

A statement that is guranteed to be true is a

warranty.

In an insurance contract, the consideration that the insured gives is called....

A premium payment

Which of the following is not an element of a legal contract? A. Offer B. Acceptance C. Legal Purpose D. Unilateral

Unilateral

Jill is filling out an insurance application with information that she believes to be true. The information that she is providing is considered

A representation

An insurance contract is prepared by one party ( the insurance company) with little or no opportunity for the other party (the insured) to bargain. This characteristic is called...

Adhesion

In insurance, an insured may pay premiums for many years without having a loss, or an insured may suffer a loss and get a larger amount of money from the insurance company than he has paid in premiums. For this reason, an insurance contract is

Aleatory

Which of the following individuals would be considered a competent party in an insurance contract? A. Curt, who turns 12 at the end of the year. B. Stephen who is 21, does not have a job, and lives at home with his parents. C. Maria, who has been drinking heavily at a bar prior to meeting with her insurance agent. D. Alexis, who recently was diagnosed as mentally insane.

Stephen who is 21, does not have a job, and lives at home with his parents.

An agreement between two parties is also called

an offer and acceptance

Anthony intentionally lied on his insurance application to obtain coverage. This is an example of

fraud

Misrepresentations do not necessarily void insurance contracts. To do so, they must be

material

The failure to disclose know facts is considered

material misrepresentation.