Principles of Contract and Insurance Law Quiz

An offer is a proposal made with the intention to create a legal obligation if accepted.

Consideration is what each party to a contract must receive to make the contract legally binding.

The statute of frauds mandates that certain types of contracts must be in writing to be enforceable.

Subrogation allows an insurer to step into the shoes of the insured to recover from third parties.

The parole evidence rule limits the use of extrinsic evidence to alter the terms of a written contract.

Underwriting involves evaluating risks to determine if they meet the insurer's standards and pricing accordingly.

Privity of contract means that only the parties involved in the contract can enforce its terms or be bound by them.

Uberrimae fidei requires both parties to an insurance contract to act with complete honesty and disclosure.

Force majeure refers to uncontrollable events that may relieve parties from fulfilling their contractual duties.

An indemnity clause outlines the extent of one party's responsibility to compensate the other for losses or damages.

Warranties are assurances about product quality or performance, while representations are factual statements influencing contract formation.

Insurance brokers act as intermediaries between insurance companies and clients, helping clients find suitable coverage.