Contract law & application

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Contract law & application

  1. 1. Donna M. Kesot, CPCU ©February 19, 2013
  2. 2. Essential Breach of Contract Estoppel ReviewElements Contract Formation 10 10 10 10 10 20 20 20 20 20 30 30 30 30 30 40 40 40 40 40 50 50 50 50 50
  3. 3. Category 1 questions follow
  4. 4. Question Name 4 Essential Elements of a Contract
  5. 5. Answer 1. Agreement (an offer & acceptance) 2. Capacity to contract 3. Consideration 4. Legal Purpose Without ALL four, the contract is not legally enforceable
  6. 6. Question 3 Elements of an Offer
  7. 7. 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)
  8. 8. Question 5 Essential Elements of duration & termination
  9. 9. 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)
  10. 10. Question 6 Characteristics of Insurance Contracts
  11. 11. 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
  12. 12. Question 5 Essential Elents for an Insurance Contract
  13. 13. 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
  14. 14. Category 2 questions follow
  15. 15. Question What is the doctrine of Estoppel?
  16. 16. 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
  17. 17. Question What 3 things trigger estoppel in Insurance Law?
  18. 18. Answer 1. False representation of a material fact 2. Reasonable reliance on the representation 3. Resulting in injury or detriment to the insured
  19. 19. Question How does waiver, estoppel, & election prevent the insurer from reviving a defense forfeited earlier?
  20. 20. 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
  21. 21. Question What is the Parol Evidence Rule?
  22. 22. 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
  23. 23. Question Describe 3 ways estoppel differs from waiver.
  24. 24. 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.
  25. 25. Category 3 questions follow
  26. 26. Question Repudiation v Anticipatory Breach
  27. 27. 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
  28. 28. Question Material v Minor Breach
  29. 29. 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
  30. 30. Question Name two equitable remedies
  31. 31. Answer 1. Specific Performance 2. Injunction
  32. 32. Question Bad Faith
  33. 33. 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
  34. 34. Question Explain each of the 5 types of damages awarded for breach of contract
  35. 35. 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)
  36. 36. Category 4 questions follow
  37. 37. Question 3 elements that make an offer valid
  38. 38. Answer A valid offer requires: 1. Intent to contract 2. Definite terms 3. Communication to offeree Acceptance requires a valid offer & valid acceptance
  39. 39. Question Novation
  40. 40. Answer The substitution of a 3 rd party for one of the original parties to a contract, releasing the original party from rights and obligations under the contract
  41. 41. Question A valid acceptance requires 3 things
  42. 42. 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
  43. 43. Question Executory v Implied v Express Contracts
  44. 44. 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.
  45. 45. Question Void v Voidable Contracts
  46. 46. 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.
  47. 47. Category 5 questions follow
  48. 48. Question Allegation
  49. 49. Answer A claim made in a complaint by a plainiff specifting what the plaintiff expects to prove to obtain a judgment against the defendant
  50. 50. Question Answer
  51. 51. Answer A document filed in court by a defendant responding to a plaintiff’s complaint and explaining why the plaintiff should not win the case.
  52. 52. Question Interrogatories
  53. 53. Answer Specific written questions or requests raised by one party to a lawsuit that the opposing party must answer in writing
  54. 54. Question Hearsay Rule
  55. 55. Answer The rule of evidence that prevents the admission of out of court statements not made under oath by a person who is unavailable to testify.
  56. 56. Question Civil Law v Common Law
  57. 57. 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.

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