Ch 2 Contract Law

A deliberate act that causes harm to another person regardless of whether the offending

party intended to injure the aggrieved party is a

• Contract of adhesion

• Unintentional tort

• Material misrepresentation

• Intentional tort

To prevent people from taking advantage of minors or the mentally incompetent, a

contract must have which element?

• Offer and acceptance

• Competent parties

• Advice and consent

• Legal purpose

The consideration involved in an insurance contract on the part of the insured refers

to the

• Payment of the first premium and statements made on the application

• Cash or equivalent income payable to the beneficiary

• Proceeds of the policy payable upon the death of the insured

• The length of time it takes for the underwriting process to be completed

Any areas of ambiguity in an insurance contract are decided in favor of the insured

because the contract is a(n)

• Aleatory contract

• Personal contract

• Unilateral contract

• Contract of adhesion

Statements in the application for insurance that must be true to the best of the

applicant’s knowledge are called

• Warranties

• Representations

• Waivers

• Ambiguities

An applicant failed to disclose a material fact on an application. Which of the following

is correct? He is guilty of

• Twisting

• Misrepresentation

• Concealment

• Coercion

The concept that all parties to a contract are entitled to all the information necessary

to make an informed decision is called

• Rescission

• Materiality

• Consideration

• Utmost Good Faith

Which statement is INCORRECT regarding tort law?

• A tort can be either intentional or unintentional

• An unintentional tort is the result of acting without proper care

• Insurance generally will only respond to intentional torts

• Negligence is an example of an unintentional tort

An exchange of unequal amounts or values is known as a/an

• Aleatory contract

• Contract of Adhesion

• Conditional contract

• Unilateral contract

Which provision allows the policyowner to put a lapsed insurance policy back

in force under certain conditions?

• Renewal

• Grace Period

• Endorsement

• Reinstatement