Answer 1. Intent to contract (conveyed with words of promise) 2. Definite Terms (parties, subject matter, price, time of performance) 3. Communication with other party (knowledge at completed performance)
Question 5 Essential Elements of duration & termination
Answer 1. Lapse of time 2. Operation of Law (e.g. the subject of the contract becomes illegal after the offer, or is destroyed before acceptance) 3. Offeree’s Rejection 4. Counteroffers 5. Offeror’s Revocation (prior to acceptance) Once a contract arises, death/insanity does not terminate it unless it’s a personal service of the deceased/insane)
Question 6 Characteristics of Insurance Contracts
Answer 1. Conditional (e.g. payment conditioned on a covered loss) 2. Fortuitous & involve unequal amounts 3. Utmost good faith 4. Adhesion 5. Indemnity 6. Nontransferable (without insurer’s written concent
Question 5 Essential Elents for an Insurance Contract
Answer 1. Type of Coverage 2. Object/Premises to be Insured 3. Amount of Insurance 4. The Insured’s Name (not the carrier) 5. Duration of Coverage
Answer Estoppel is a legal principle that prohibits a party from asserting a claim or right that is inconsistent with that party’s past statement or conduct on which another party has detrimentally relied. Led down the garden path either before or after the written contract
Question What 3 things trigger estoppel in Insurance Law?
Answer 1. False representation of a material fact 2. Reasonable reliance on the representation 3. Resulting in injury or detriment to the insured
Question How does waiver, estoppel, & election prevent the insurer from reviving a defense forfeited earlier?
Answer 1. Waiver is intentional relinquishment of a known right in an existing contract 2. Estoppel is a legal principle that prohibits a party from asserting a claim or right that is inconsistent with hat party’s past statement or conduct on which another party has detrimentally relied. 3. Election is a voluntary act of choosing between two alternative rights Give Examples
Answer 1. Parol evidence rule: In order to waive a right the contract must be in force 2. Prohibits oral evidence from being introduced into evidence
Question Describe 3 ways estoppel differs from waiver.
Answer 1. Waiver is contractual in nature and rests upon agreement between parties. Estoppel is equitable in nature and arises from false misrepresentation 2. Waiver gives effect to the waiving party’s intention. Estoppel defeats the inequitable intent of the estopped party 3. The parol evidence rule applies to waiver but not to estoppel.
Answer Repudiation: A party’s refusal to meet obligations under a contract at time of performance Anticipatory Beach: A party’s unequivocal indication before performance is due that she will not perform when performance is due
Answer Material Breach: Violation of the agreement that would justify an owner’s termination of the contract Material v Minor Breach is a matter of degree • Extent of breaching party’s performance • Willfulness of the breach • Extent to which the non-breaching part obtained benefits and can receive compensation
Answer Intentional or reckless act, extreme or outrageous in nature causing severe emotional distress, that results in physical injury Extracontractual Damages can be awarded for this breach
Question Explain each of the 5 types of damages awarded for breach of contract
Answer 1. Compensatory Damages (indemnify for actual harm) 2. Consequential Damages (indemnify for indirect loss, foreseeable) 3. Punitive or Exemplary Damages (to punish recklessness, maliciousness, deceitfulness, to make an example) 4. Extracontractual Damages --breach of insurer’s duty of good faith --Intentional infiction of emotional distress or extreme & outrageous conduct 5. Liquidated Damages (reasonable estimate of damages, in contract)
Answer 1. It must be made by the offeree 2. It must be unconditional and unequivocal 3. The offeree must communicate the acceptance to the offeror by appropriate word or act
Question Executory v Implied v Express Contracts
Answer Executory –not completely performed by one or both parties Express—terms and intentions are explicitly stated Implied—terms and intentions are indicated by the actions of the parties to the contract and the surrounding circumstances.
Answer Void – an agreement that never reaches contract status, based on an unenforceable agreement (i.e. illegal) , Not legally enforceable. Voidable – one party can reject (avoid) based on some circumstance surrounding the contract execution.
Answer Civil Law has a foundation of law in Europe, Latin America, Scotland, Louisiana based on the French Code of Napoleon. The system relies on scholarly interpretation of their codes and constitutions, not court decision Common Law is based on English law and ‘precedent.’ Law developed from court cases.