Chapter 1 Section 1 Part 2

Question 1

most popular way of dealing with risk?

Answer 1

transfer

Question 2

speculative risk (+ex)

Answer 2

possibility of both loss and gain (placing bet at blackjack table)

Question 3

pure risk (+ex)

Answer 3

no chance of financial gain (house burning down)

Question 4

speculative/pure risk - which will insurers not provide policy for?

Answer 4

speculative

Question 5

five elements all contracts contain

Answer 5

agreement
consideration
legality of object
legal capacity
genuine intention

Question 6

agreement (3)

Answer 6

• meeting of minds
• to subject matter, terms of contract
• first test of enforceability at law

Question 7

consideration (3)

Answer 7

• exchange (of) something of value between parties
• payment/promise of payment of premium
• promise to indemnify insured

Question 8

legality of object (2, 3 ex’s)

Answer 8

legal, not contrary to public policy (killing, illegal drugs, fraud, etc)

Question 9

legal capacity of parties to contract (2)

Answer 9

legal capacity

competent

Question 10

genuine intention

Answer 10

parties actually intended to enter into contract