What is a contract in English law?
An agreement enforceable by law between two or more persons to do or abstain from doing something, intending to create legal relations.
What is an insurance contract?
An agreement where the insured pays a premium and follows policy terms, and the insurer agrees to pay money or value if a specified event occurs.
When does a contract come into existence?
When one party makes an offer and the other gives unconditional acceptance.
What is unconditional acceptance?
Final and unqualified agreement to the offer.
What is conditional acceptance?
Acceptance introducing new terms → becomes a counter-offer.
What is the postal acceptance rule?
If post is agreed as communication, acceptance is complete when the letter is posted, even if delayed or lost.
What is consideration in a contract?
Each party’s side of the bargain that supports the contract (e.g., payment of premium).
How long do insurance contracts last?
Until expiry or renewal date. Some are short-term (travel), others renewable (motor/home).
Can insurers refuse renewal?
Yes, there is no obligation to offer renewal terms.
How can insurance contracts be cancelled?
Insurer: Usually with 14 days’ notice and pro-rata refund.
Policyholder: Pays only for service provided.
Cancellation rights:
PPI → 30 days
All other GI policies → 14 days
No penalty, no need to explain
Refund must be given (minus time on cover)
Other ways insurance contracts end?
Fulfilment: Subject matter totally lost.
Voidable: Breach of continuing condition.
Void: No insurable interest at outset.
What is breach of warranty?
Failure to comply exactly with a warranty term.
Before IA 2015: Automatic discharge of insurer liability.
After IA 2015: Cover suspended until breach remedied.
What happens if fraud occurs under IA 2015?
Insurer can:
Refuse claim.
Recover paid amounts.
Terminate contract from fraud date (no premium refund).
What is an agent in law?
Someone authorised by a principal to create a contractual relationship with a third party.
How can agency relationships arise?
Consent: Agreement between principal and agent.
Necessity: Emergency action to protect property.
Ratification: Principal accepts unauthorised act.
When is an intermediary agent of the insured?
Advising on cover or arranging insurance.
Advising on claims or assisting with them.
When is an intermediary agent of the insurer?
Handling proposal forms and confirming cover.
Surveying property.
Collecting premiums.
Paying claims.
Duties of an agent?
Obedience, personal performance, due care, good faith, accountability.
Duties of a principal?
Remuneration and indemnity.
What is an undisclosed principal?
Agent acts for a principal without revealing them, but must have authority.
What is actual authority?
Express (written/oral) or implied authority given to an agent.
What is apparent authority?
Third party assumes agent has authority because action is usual in the trade.
How can agency be terminated?
Mutual agreement, withdrawal, death, bankruptcy, or insanity.
