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130-403: Life policies are legal contracts and the terms of each contract describe the limitations of the insured events. Often, specific exclusions written into the contract limit the liability of the insurer; common examples include claims relating to suicide , fraud, war, riot, and civil commotion. Difficulties may arise where an event is not clearly defined, for example, the insured knowingly incurred

260-412: A Law Commission -sponsored proposal to both unite and codify English and Scots Law, proposed the abolition of consideration. Some commentators have suggested for consideration to be replaced by estoppel as a basis for contracts. A contract is often evidenced in writing or by deed . The general rule is that a person who signs a contractual document will be bound by the terms in that document. This rule

390-414: A cash value up to its date of maturation. The owner can access the money in the cash value by withdrawing money, borrowing the cash value, or surrendering the policy and receiving the surrender value. The three basic types of permanent insurance are whole life , universal life , and endowment . Whole life insurance provides lifetime coverage for a set premium amount. Universal life insurance (ULl)

520-539: A meeting of the minds between the parties. Within the overarching category of civil law jurisdictions, there are several distinct varieties of contract law with their own distinct criteria: the German tradition is characterised by the unique doctrine of abstraction , systems based on the Napoleonic Code are characterised by their systematic distinction between different types of contracts, and Roman-Dutch law

650-521: A rider . If a rider is purchased, the policy generally pays double the face amount if the insured dies from an accident. This was once called double indemnity insurance . In some cases, triple indemnity coverage may be available. Legal contract A contract is an agreement that specifies certain legally enforceable rights and obligations pertaining to two or more parties . A contract typically involves consent to transfer of goods , services , money , or promise to transfer any of those at

780-434: A severability clause . The test of whether a clause is severable is an objective test—whether a reasonable person would see the contract standing even without the clauses. Typically, non-severable contracts only require the substantial performance of a promise rather than the whole or complete performance of a promise to warrant payment. However, express clauses may be included in a non-severable contract to explicitly require

910-467: A tort action based on reliance. Although verbal contracts are generally binding in most common law jurisdictions, some types of contracts may require formalities such as being in writing or by deed . A contract cannot be formed without assent of the two parties to be bound by its terms. Normally this is by written signature (which may include an electronic signature), but the assent may also be oral or by conduct. Assent may be given by an agent for

1040-479: A $ 100,000 policy in the competitive US life insurance market. Most of the revenue received by insurance companies consists of premiums, but revenue from investing the premiums forms an important source of profit for most life insurance companies. Group insurance policies are an exception to this. In the United States, life insurance companies are never legally required to provide coverage to everyone, with

1170-425: A baseline for the cost of insurance, but the health and family history of the individual applicant is also taken into account (except in the case of Group policies). This investigation and resulting evaluation is termed underwriting . Health and lifestyle questions are asked, with certain responses possibly meriting further investigation. Specific factors that may be considered by underwriters include: Based on

1300-459: A certain age limit. Some policies also pay out in the case of critical illness. Policies are typically traditional with-profits or unit-linked (including those with unitized with-profits funds). Endowments can be cashed in early (or surrendered) and the holder then receives the surrender value which is determined by the insurance company depending on how long the policy has been running and how much has been paid into it. Accidental death insurance

1430-407: A certain field. In addition, the court may also imply a term; if price is excluded, the court may imply a reasonable price, with the exception of land, and second-hand goods, which are unique. If there are uncertain or incomplete clauses in the contract, and all options in resolving its true meaning have failed, it may be possible to sever and void just those affected clauses if the contract includes

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1560-696: A civil law legal system at independence or adopting civil and commercial codes based on German or French law. While jurisdictions such as Japan, South Korea, and the Republic of China modelled their contract law after the German pandectist tradition, the Arab world largely modelled its legal framework after the Napoleonic Code . While the Netherlands adopted a legal system based on the Napoleonic Code in

1690-569: A contract use technicalities to satisfy requirements while in fact circumventing them in practice. Typically, this is in the form of "peppercorn" consideration, i.e. consideration that is negligible but still satisfies the requirements of law. The doctrine of consideration has been expressly rejected by the UNIDROIT Principles of International Commercial Contracts on the grounds that it yields uncertainty and unnecessary litigation, thereby hindering international trade. Similarly,

1820-454: A contractual term will become a condition: A term is a condition (rather than an intermediate or innominate term, or a warranty), in any of the following five situations: (1) statute explicitly classifies the term in this way; (2) there is a binding judicial decision supporting this classification of a particular term as a "condition"; (3) a term is described in the contract as a "condition" and upon construction it has that technical meaning; (4)

1950-411: A future date. The activities and intentions of the parties entering into a contract may be referred to as contracting . In the event of a breach of contract , the injured party may seek judicial remedies such as damages or equitable remedies such as specific performance or rescission . A binding agreement between actors in international law is known as a treaty . Contract law, the field of

2080-463: A life insurance company would have to collect approximately $ 50 a year from each participant to cover the relatively few expected claims. (0.35 to 0.66 expected deaths in each year × $ 100,000 payout per death = $ 35 per policy.) Other costs, such as administrative and sales expenses, also need to be considered when setting the premiums. A 10-year policy for a 25-year-old non-smoking male with preferred medical history may get offers as low as $ 90 per year for

2210-405: A loan secured by real property and usually features a level premium amount for a declining policy face value because what is insured is the principal and interest outstanding on a mortgage that is constantly being reduced by mortgage payments. The face amount of the policy is always the amount of the principal and interest outstanding that are paid should the applicant die before the final installment

2340-411: A mixture of Roman-Dutch law and English common law (e.g. South Africa and neighbouring countries). In common law jurisdictions, the formation of a contract generally requires an offer, acceptance , consideration , and mutual intent to be bound . The concept of contract law as a distinct area of law in common law jurisdictions originated with the now-defunct writ of assumpsit , which was originally

2470-451: A party. Remedies for breach of contract include damages (monetary compensation for loss) and, for serious breaches only, cancellation. Specific performance and injunction may also be available if damages are insufficient. In order for a legally enforceable contract to be formed, the parties must reach mutual assent (also called a meeting of the minds ). This is typically reached through an offer and an acceptance which does not vary

2600-406: A patient refuses to pay after being examined by a doctor, the patient has breached a contract implied in fact. A contract which is implied in law is sometimes called a quasi-contract . Such contracts are means for courts to remedy situations in which one party would be unjustly enriched were he or she not required to compensate the other. Quantum meruit claims are an example. Where something

2730-478: A pharmaceutical manufacturer, advertised a smoke ball that would, if sniffed "three times daily for two weeks", prevent users from catching the flu . If it failed to do so, the company promised to pay the user £ 100, adding that they had "deposited £1,000 in the Alliance Bank to show [their] sincerity in the matter". When the company was sued for the money, they argued the advert should not have been taken as

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2860-405: A policy is the policy owner, while the insured is the person whose death will trigger payment of the death benefit. The owner and insured may or may not be the same person. For example, if Joe buys a policy on his own life, he is both the owner and the insured. But if Jane, his wife, buys a policy on Joe's life, she is the owner and he is the insured. The policy owner is the guarantor and they will be

2990-439: A profit. The cost of insurance is determined using mortality tables calculated by actuaries . Mortality tables are statistically based tables showing expected annual mortality rates of people at different ages. As people are more likely to die as they get older, the mortality tables enable insurance companies to calculate the risk and increase premiums with age accordingly. Such estimates can be important in taxation regulation. In

3120-530: A purported acceptance that varies the terms of an offer is not an acceptance but a counteroffer and hence a rejection of the original offer. The principle of offer and acceptance has been codified under the Indian Contract Act, 1872 . In determining if a meeting of the minds has occurred, the intention of contracting parties is interpreted objectively from the perspective of a reasonable person . The "objective" approach towards contractual intent

3250-438: A reasonable construction of the contract. In New South Wales, even if there is uncertainty or incompleteness in a contract, the contract may still be binding on the parties if there is a sufficiently certain and complete clause requiring the parties to undergo arbitration, negotiation or mediation. Courts may also look to external standards, which are either mentioned explicitly in the contract or implied by common practice in

3380-448: A risk by consenting to an experimental medical procedure or by taking medication resulting in injury or death. Modern life insurance bears some similarity to the asset-management industry, and life insurers have diversified their product offerings into retirement products such as annuities . Life-based contracts tend to fall into two major categories: An early form of life insurance dates to Ancient Rome ; "burial clubs" covered

3510-430: A serious, legally binding offer but a puff . The Court of Appeal held that it would appear to a reasonable man that Carbolic had made a serious offer and determined that the reward was a contractual promise. As decided in the case of Pharmaceutical Society of Great Britain v Boots Cash Cashiers , an offer that is made in response to an invitation to treat, without any negotiation or explicit modification of terms,

3640-792: A similar fund in 1769. Between 1787 and 1837 more than two dozen life insurance companies were started, but fewer than half a dozen survived. In the 1870s, military officers banded together to found both the Army ( AAFMAA ) and the Navy Mutual Aid Association (Navy Mutual), inspired by the plight of widows and orphans left stranded in the West after the Battle of the Little Big Horn , and of the families of U.S. sailors who died at sea. The person responsible for making payments for

3770-625: A statement of common contractual principles for arbitrators and judges to apply where national laws are lacking. Notably, the Principles reject the doctrine of consideration, arguing that elimination of the doctrine "bring[s] about greater certainty and reduce litigation" in international trade. The Principles also rejected the abstraction principle on the grounds that it and similar doctrines are "not easily compatible with modern business perceptions and practice". Contract law can be contrasted with tort law (also referred to in some jurisdictions as

3900-455: A term is a condition is determined in part by the parties' intent. In a less technical sense, however, a condition is a generic term and a warranty is a promise. In specific circumstances these terms are used differently. For example, in English insurance law, violation of a "condition precedent" by an insured is a complete defence against the payment of claims. In general insurance law,

4030-423: A tort-based action (such as the tort of deceit ) if the misrepresentation is negligent or fraudulent. In U.S. law, the distinction between the two is somewhat unclear. Warranties are generally viewed as primarily contract-based legal action, while negligent or fraudulent misrepresentations are tort-based, but there is a confusing mix of case law in the United States. In modern English law, sellers often avoid using

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4160-488: A warranty is a promise that must be complied with. In product transactions, warranties promise that the product will continue to function for a certain period of time. In the United Kingdom, the courts determine whether a term is a condition or warranty, regardless of how or whether the term was classified in the contract. Statute may also declare a term or nature of term to be a condition or warranty. For example,

4290-430: A wider class of persons. Research in business and management has also paid attention to the influence of contracts on relationship development and performance. Private international law is rooted in the principle that every jurisdiction has its own distinct contract law shaped by differences in public policy, judicial tradition, and the practices of local businesses. Consequently, while all systems of contract law serve

4420-408: Is a "provision forming part of a contract". Each term gives rise to a contractual obligation, breach of which can give rise to litigation , although a contract may also state circumstances in which performance of an obligation may be excused. Not all terms are stated expressly, and terms carry different legal weight depending on how central they are to the objectives of the contract. Contracting

4550-653: Is a relatively new insurance product, intended to combine permanent insurance coverage with greater flexibility in premium payments, along with the potential for greater growth of cash values. There are several types of universal life insurance policies, including interest-sensitive (also known as "traditional fixed universal life insurance"), variable universal life (VUL) , guaranteed death benefit , and has equity-indexed universal life insurance . Universal life insurance policies have cash values. Paid-in premiums increase their cash values; administrative and other costs reduce their cash values. Universal life insurance addresses

4680-436: Is a specific phase within procurement . It includes creating, negotiating, and managing contracts. Obligations created by contracts can generally be transferred, subject to requirements imposed by law. Laws regarding the modification of contracts or the assignment of rights under a contract are broadly similar across jurisdictions. In most jurisdictions, a contract may be modified by a subsequent contract or agreement between

4810-565: Is a type of limited life insurance that is designed to cover the insured should they die as a result of an accident. "Accidents" run the gamut from abrasions to catastrophes but normally do not include deaths resulting from non-accident-related health problems or suicide. Because they only cover accidents, these policies are much less expensive than other life insurance policies. Such insurance can also be accidental death and dismemberment insurance or AD&D . In an AD&D policy, benefits are available not only for accidental death but also for

4940-433: Is advertised in a newspaper or on a poster, the advertisement will not normally constitute an offer but will instead be an invitation to treat , an indication that one or both parties are prepared to negotiate a deal. An exception arises if the advertisement makes a unilateral promise, such as the offer of a reward, as in the case of Carlill v Carbolic Smoke Ball Co , decided in nineteenth-century England . The company,

5070-783: Is any coverage that determines benefits based on actual losses whereas "assurance" is coverage with predetermined benefits irrespective of the losses incurred. Life insurance may be divided into two basic classes: temporary and permanent; or the following subclasses: term, universal, whole life , and endowment life insurance. Term assurance provides life insurance coverage for a specified term (usually 10–30 years). Term life insurance policies do not accumulate cash value, but are significantly less expensive than permanent life insurance policies with equivalent face amounts. Policyholders can save to provide for increased term premiums or decrease insurance needs (by paying off debts or saving to provide for survivor needs). Mortgage life insurance insures

5200-404: Is largely based on the writings of renaissance-era Dutch jurists and case law applying general principles of Roman law prior to the Netherlands' adoption of the Napoleonic Code. The UNIDROIT Principles of International Commercial Contracts , published in 2016, aim to provide a general harmonised framework for international contracts, independent of the divergences between national laws, as well as

5330-439: Is paid. Group life insurance (also known as wholesale life insurance or institutional life insurance ) is term insurance covering a group of people, usually employees of a company, members of a union or association, or members of a pension or superannuation fund. Individual proof of insurability is not normally a consideration in its underwriting. Rather, the underwriter considers the size, turnover, and financial strength of

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5460-411: Is presumed to incorporate the terms of the invitation to treat. In contract law, consideration refers to something of value which is given in exchange for the fulfilment of a promise. In Dunlop v. Selfridge , Lord Dunedin described consideration "the price for which the promise of the other is bought". Consideration can take multiple forms and includes both benefits to the promisor and detriments to

5590-545: Is referred to as the rule in L'Estrange v Graucob or the "signature rule". This rule was approved by the High Court of Australia in Toll(FGCT) Pty Ltd v Alphapharm Pty Ltd . The rule typically binds a signatory to a contract regardless of whether they have actually read it, provided the document is contractual in nature. However, defences such as duress or unconscionability may enable the signer to avoid

5720-432: Is reserved only for the healthiest individuals in the general population. This may mean, that the proposed insured has no adverse medical history, is not under medication, and has no family history of early-onset cancer , diabetes , or other conditions. Preferred means that the proposed insured is currently under medication and has a family history of particular illnesses. Most people are in the standard category. People in

5850-729: Is restricted on public policy grounds. Consequently, the validity and enforceability of a contract depends not only on whether a jurisdiction is a common, civil, or mixed law jurisdiction but also on the jurisdiction's particular policies regarding capacity. For instance, very small children may not be held to bargains they have made, on the assumption that they lack the maturity to understand what they are doing; errant employees or directors may be prevented from contracting for their company, because they have acted ultra vires (beyond their power). Another example might be people who are mentally incapacitated, either by disability or drunkenness. Specifics vary between jurisdictions, for example article 39 of

5980-410: Is typically determined at the time the policy is purchased, and it is based on factors such as the policyholder's age, health, and occupation. The death benefit is only payable if the policyholder dies while the policy is in effect. If the policyholder outlives the policy, the death benefit is not paid, and the policy will typically expire. Some policies may allow the policyholder to receive a portion of

6110-707: The Egyptian Civil Code , modelled after the Napoleonic Code but containing provisions designed to fit Arab and Islamic society. The Egyptian Civil Code was subsequently used as a model for the majority of Arab states. In the 20th century, the growth of export trade led to countries adopting international conventions, such as the Hague-Visby Rules and the UN Convention on Contracts for the International Sale of Goods , bringing

6240-620: The European Union being an economic community with a range of trade rules, there continues to be no overarching "EU Law of Contract". In 2021, Mainland China adopted the Civil Code of the People's Republic of China , which codifies its contract law in book three. While generally classified as a civil law jurisdiction, contract law in mainland China has been influenced by a number of sources, including traditional Chinese views toward

6370-654: The Law of Property Act 1925 ). Nonetheless, a valid contract may generally be made orally or even by conduct. An oral contract may also be called a parol contract or a verbal contract, with "verbal" meaning "spoken" rather than "in words", an established usage in British English with regards to contracts and agreements, and common although somewhat deprecated as "loose" in American English . An unwritten, unspoken contract, also known as "a contract implied by

6500-629: The Meiji Restoration , Japan adopted a series of legal codes modelled primarily on German law, adopting its commercial code in 1899. The Japanese adaptation of German civil law was spread to the Korean Peninsula and China as a result of Japanese occupation and influence, and continues to form the basis of the legal system in South Korea and the Republic of China. In 1949, Abd El-Razzak El-Sanhuri and Edouard Lambert drafted

6630-787: The Neolithic Revolution . A notable early modern development in contract law was the emergence of the hawala system in the Indian subcontinent and the Arab world , under which a series of contractual relationships formed the basis of an informal value transfer system spanning the Silk Road . In the Indian subcontinent, the hawala system gave rise to the hundi , a transferrable contract entitling its holder in due course to obtain money from its issuer or an agent thereof, giving rise to

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6760-484: The Philippine Civil Code provides a comprehensive overview of the most typical circumstances resulting in lost or diminished juridical capacity: age, mental disability, the state of being a deaf-mute , penalty, absence, insolvency, and trusteeship . Edward Rowe Mores Edward Rowe Mores , FSA ( / ˈ m ɒr ɪ s / ; 24 January 1731 [ OS : 13 January 1730] – 22 November 1778)

6890-682: The Sale of Goods Act 1979 s15A provides that terms as to title, description, quality and sample are generally conditions . The United Kingdom has also developed the concept of an "intermediate term" (also called innominate terms), first established in Hong Kong Fir Shipping Co Ltd v Kawasaki Kisen Kaisha Ltd [1962]. Traditionally, while warranties are contractual promises which are enforced through legal action, regardless of materiality, intent, or reliance, representations are traditionally precontractual statements that allow for

7020-502: The United Nations Convention on Contracts for the International Sale of Goods does not require consideration for a contract to be valid, thereby excluding the doctrine with regard to contracts covered by the convention even in common law jurisdictions where it would otherwise apply. The continued existence of the doctrine in common law jurisdictions is controversial. Scots lawyer Harvey McGregor 's " Contract Code ",

7150-553: The law of obligations concerned with contracts, is based on the principle that agreements must be honoured . Like other areas of private law , contract law varies between jurisdictions. In general, contract law is exercised and governed either under common law jurisdictions, civil law jurisdictions, or mixed-law jurisdictions that combine elements of both common and civil law. Common law jurisdictions typically require contracts to include consideration in order to be valid, whereas civil and most mixed-law jurisdictions solely require

7280-503: The 1980s and 1990s, the SOA 1975-80 Basic Select & Ultimate tables were the typical reference points, while the 2001 VBT and 2001 CSO tables were published more recently. As well as the basic parameters of age and gender, the newer tables include separate mortality tables for smokers and non-smokers, and the CSO tables include separate tables for preferred classes. The mortality tables provide

7410-496: The CQV for the proceeds), was found liable in court for contributing to the wrongful death of the victim ( Liberty National Life v. Weldon , 267 Ala.171 (1957)). Special exclusions may apply, such as suicide clauses, whereby the policy becomes null and void if the insured dies by suicide within a specified time (usually two years after the purchase date; some states provide a statutory one-year suicide clause). Any misrepresentations by

7540-611: The Canadian province of Quebec are mixed law jurisdictions which primarily adhere to French legal tradition with regard to contract law and other principles of private law. Over the course of the nineteenth and twentieth century, the majority of jurisdictions in the Middle East and East Asia adopted civil law legal frameworks based on the Napoleonic, German, or Swiss model. The Napoleonic Code shapes contract law across much of

7670-674: The Directors tried to ensure that policyholders received a fair return on their investments. Premiums were regulated according to age, and anybody could be admitted regardless of their state of health and other circumstances. The sale of life insurance in the U.S. began in the 1760s. The Presbyterian Synods in Philadelphia and New York City created the Corporation for Relief of Poor and Distressed Widows and Children of Presbyterian Ministers in 1759; Episcopalian priests organized

7800-548: The Middle East, while contract law in Japan, South Korea, and the Republic of China is rooted in the German pandectist tradition. In 1926, Turkey replaced its Ottoman-era mixture of Islamic and secular laws with a secular civil code modelled after that of Switzerland , with its contract and commercial law modelled after the Swiss Code of Obligations , which was in turn influenced by German and French legal traditions. Following

7930-468: The US population male mortality rates of 1.3 per 1,000 at age 25 and 19.3 at age 65 (without regard to health or smoking status). Upon the insured's death, the insurer requires acceptable proof of death before it pays the claim. If the insured's death is suspicious and the policy amount is large, the insurer may investigate the circumstances surrounding the death before deciding whether it has an obligation to pay

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8060-407: The United States requires a written contract for tangible product sales in excess of $ 500, and for real estate contracts to be written. If the contract is not required by law to be written, an oral contract is generally valid and legally binding. The United Kingdom has since replaced the original Statute of Frauds, but written contracts are still required for various circumstances such as land (through

8190-491: The above and additional factors, applicants will be placed into one of several classes of health ratings which will determine the premium paid in exchange for insurance at that particular carrier. Life insurance companies in the United States support the Medical Information Bureau (MIB), which is a clearing house of information on persons who have applied for life insurance with participating companies in

8320-454: The acts of the parties", which can be legally implied either from the facts or as required in law . Implied-in-fact contracts are real contracts under which parties receive the "benefit of the bargain". However, contracts implied in law are also known as quasi-contracts, and the remedy is quantum meruit , the fair market value of goods or services rendered. In commercial agreements it is presumed that parties intend to be legally bound unless

8450-439: The agreement of the original beneficiary. In cases where the policy owner is not the insured (also referred to as the celui qui vit or CQV), insurance companies have sought to limit policy purchases to those with an insurable interest in the CQV. For life insurance policies, close family members and business partners will usually be found to have an insurable interest. The insurable interest requirement usually demonstrates that

8580-489: The basis of public policy . For example, in the English case Balfour v. Balfour a husband agreed to give his wife £30 a month while he was away from home, but the court refused to enforce the agreement when the husband stopped paying. In contrast, in Merritt v Merritt the court enforced an agreement between an estranged couple because the circumstances suggested their agreement was intended to have legal consequences. If

8710-446: The boundary between tort and contract law somewhat uncertain. Contracts are widely used in commercial law , and for the most part form the legal foundation for transactions across the world. Common examples include contracts for the sale of services and goods, construction contracts , contracts of carriage , software licenses , employment contracts , insurance policies , sales or leases of land, among others. A contractual term

8840-499: The buyer explicitly expressed the importance of this requirement. The relative knowledge of the parties may also be a factor, as in English case of Bissett v Wilkinson , where the court did not find misrepresentation when a seller said that farmland being sold would carry 2000 sheep if worked by one team; the buyer was considered sufficiently knowledgeable to accept or reject the seller's opinion. According to Andrew Tettenborn et al , there are five differing circumstances under which

8970-409: The categorisation of contracts into bilateral and unilateral ones. For example, the High Court of Australia stated that the term unilateral contract is "unscientific and misleading". In certain circumstances, an implied contract may be created. A contract is implied in fact if the circumstances imply that parties have reached an agreement even though they have not done so expressly. For example, if

9100-402: The claim. Payment from the policy may be as a lump sum or as an annuity , which is paid in regular installments for either a specified period or for the beneficiary's lifetime . Death benefits are the primary feature of life insurance policies, and they provide a lump sum payment to the beneficiaries of the policyholder in the event of the policyholder's death. The amount of the death benefit

9230-527: The contract itself, countries have rules to determine the law governing the contract and the jurisdiction for disputes. For example, European Union Member States apply Article 4 of the Rome I Regulation to decide the law governing the contract, and the Brussels I Regulation to decide jurisdiction. Contracts have existed since antiquity, forming the basis of trade since the dawn of commerce and sedentism during

9360-728: The cost of members' funeral expenses and assisted survivors financially. In 1816, an archeological excavation in Minya, Egypt (under an Eyalet of the Ottoman Empire ) produced a Nerva–Antonine dynasty -era tablet from the ruins of the Temple of Antinous in Antinoöpolis , Aegyptus that prescribed the rules and membership dues of a burial society collegium established in Lanuvium , Italia in approximately 133 AD during

9490-438: The crew were already contracted to sail the ship. The pre-existing duty rule also extends to general legal duties; for example, a promise to refrain from committing a tort or crime is not sufficient. Some jurisdictions have modified the English principle or adopted new ones. For example, in the Indian Contract Act, 1872 , past consideration constitutes valid consideration, and that consideration may be from any person even if not

9620-481: The early 19th century, Dutch colonies retained the precedent-based Roman-Dutch law . British colonies in Southern Africa adopted Roman-Dutch principles in areas of private law via reception statutes adopting South African law, retaining Roman-Dutch law for most matters of private law while applying English common law principles in most matters of public law . Saint Lucia , Mauritius , Seychelles , and

9750-498: The exception of Civil Rights Act compliance requirements. Insurance companies alone determine insurability, and some people are deemed uninsurable. The policy can be declined or rated (increasing the premium amount to compensate for the higher risk), and the amount of the premium will be proportional to the face value of the policy. Many companies separate applicants into four general categories. These categories are preferred best , preferred , standard , and tobacco . Preferred best

9880-431: The extent of their enforceability as part of a contract. English common law distinguishes between important conditions and warranties , with a breach of a condition by one party allowing the other to repudiate and be discharged while a warranty allows for remedies and damages but not complete discharge. In modern United States law the distinction is less clear but warranties may be enforced more strictly. Whether or not

10010-508: The freedom of contract in order to prevent businesses from exploiting consumers. In 1993, Harvey McGregor , a British barrister and academic, produced a "Contract Code" under the auspices of the English and Scottish Law Commissions , which was a proposal to both unify and codify the contract laws of England and Scotland. This document was offered as a possible "Contract Code for Europe", but tensions between English and German jurists meant that this proposal has so far come to naught. In spite of

10140-534: The freedom of contract. For example, the Civil Rights Act of 1964 restricted private racial discrimination against African-Americans. The US Constitution contains a Contract Clause , but this has been interpreted as only restricting the retroactive impairment of contracts. In the late twentieth and early twenty-first century, consumer protection legislation, such as Singapore's Consumer Protection (Fair Trading) Act 2003, progressively imposed limits upon

10270-567: The full performance of an obligation. English courts have established that any intention to make the contract a "complete code", so as to exclude any option to resort to a common law or extra-contractual remedy, must be evidenced in "clear express words": otherwise a "presumption that each party to a contract is entitled to all remedies which arise by operation of law" will be honoured by the courts. Common law jurisdictions typically distinguish three different categories of contractual terms, conditions, warranties and intermediate terms, which vary in

10400-568: The general purpose of contract law is to enforce promises . Other approaches to contract theory are found in the writings of legal realists and critical legal studies theorists, which have propounded Marxist and feminist interpretations of contract. Attempts at understanding the overarching purpose and nature of contracting as a phenomenon have been made, notably relational contract theory . Additionally, certain academic conceptions of contracts focus on questions of transaction cost and ' efficient breach ' theory. Another important dimension of

10530-427: The group. Contract provisions will attempt to exclude the possibility of adverse selection . Group life insurance often allows members exiting the group to maintain their coverage by buying individual coverage. The underwriting is carried out for the whole group instead of individuals. Permanent life insurance is life insurance that covers the remaining lifetime of the insured. A permanent insurance policy accumulates

10660-403: The guardian of a young girl took out a loan to educate her. After she was married, her husband promised to pay the debt but the loan was determined to be past consideration. In the early English case of Stilk v. Myrick [1809], a captain promised to divide the wages of two deserters among the remaining crew if they agreed to sail home short-handed; however, this promise was found unenforceable as

10790-410: The insured on the application may also be grounds for nullification. Most US states, for example, specify a maximum contestability period, often no more than two years. Only if the insured dies within this period will the insurer have a legal right to contest the claim on the basis of misrepresentation and request additional information before deciding whether to pay or deny the claim. The face amount of

10920-485: The last seven years. As part of the application, the insurer often requires the applicant's permission to obtain information from their physicians. Automated Life Underwriting is a technology solution which is designed to perform all or some of the screening functions traditionally completed by underwriters, and thus seeks to reduce the work effort, time and data necessary to underwrite a life insurance application. These systems allow point of sale distribution and can shorten

11050-482: The law of delicts), the other major area of the law of obligations. While tort law generally deals with private duties and obligations that exist by operation of law, and provide remedies for civil wrongs committed between individuals not in a pre-existing legal relationship , contract law provides for the creation and enforcement of duties and obligations through a prior agreement between parties. The emergence of quasi-contracts , quasi-torts , and quasi-delicts renders

11180-557: The loss of limbs or body functions such as sight and hearing. Accidental death and AD&D policies pay actual benefits only very rarely, either because the cause of death is not covered by the policy or because death occurs well after the accident, by which time the premiums have gone unpaid. Various AD&D policies have different terms and exclusions. Risky activities such as parachuting, flying, professional sports, or military service are often omitted from coverage. Accidental death insurance can also supplement standard life insurance as

11310-604: The majority of English-speaking countries, the rules are derived from English contract law which emerged as a result of precedents established by various courts in England over the centuries. Meanwhile, civil law jurisdictions generally derive their contract law from Roman law , although there are differences between German contract law , legal systems inspired by the Napoleonic Code or the Civil Code of Lower Canada (e.g. Québec and Saint Lucia ), and jurisdictions following Roman-Dutch law (e.g. Indonesia and Suriname ) or

11440-410: The manuscript was eventually published posthumously in 1783 by Richard Gough as Collections toward a Parochial History of Berkshire . In 1754–55 he assisted his friend Andrew Ducarel (who had limited eyesight) in compiling a manuscript history of Croydon Palace and the town of Croydon for presentation to Thomas Herring , Archbishop of Canterbury : however, the work led to a virulent rift between

11570-548: The name actuary to the chief official—the earliest known reference to the position as a business concern. The first modern actuary was William Morgan , who served from 1775 to 1830. In 1776 the Society carried out the first actuarial valuation of liabilities and subsequently distributed the first reversionary bonus (1781) and interim bonus (1809) among its members. It also used regular valuations to balance competing interests. The Society sought to treat its members equitably and

11700-403: The number of shares the heirs owned. The Amicable Society started with 2000 members. The first life table was written by Edmund Halley in 1693, but it was only in the 1750s that the necessary mathematical and statistical tools were in place for the development of modern life insurance. James Dodson , a mathematician and actuary, tried to establish a new company aimed at correctly offsetting

11830-565: The obligation. Further, reasonable notice of a contract's terms must be given to the other party prior to their entry into the contract. Written contracts have typically been preferred in common law legal systems. In 1677 England passed the Statute of Frauds which influenced similar statute of frauds laws in the United States and other countries such as Australia. In general, the Uniform Commercial Code as adopted in

11960-405: The offer's terms, which is known as the " mirror image rule ". An offer is defined as a promise that is dependent on a certain act, promise, or forbearance given in exchange for the initial promise An acceptance is simply the assent of the other contracting party or parties to the terms stipulated in the contract. As an offer states the offeror's willingness to be bound to the terms proposed therein,

12090-450: The offeror. Consideration must be lawful for a contract to be binding. Applicable rules in determining if consideration is lawful exist both in case law and in the codes of some common law jurisdictions. The general principles of valid consideration in the common law tradition are that: The insufficiency of past consideration is related to the pre-existing duty rule . For example, in the early English case of Eastwood v. Kenyon [1840],

12220-554: The offeror. In a reward contract, for example, a person who has lost a dog could promise a reward if the dog is found, through publication or orally. The payment could be additionally conditioned on the dog being returned alive. Those who learn of the reward are not required to search for the dog, but if someone finds the dog and delivers it, the promisor is required to pay. On the other hand, advertisements which promise bargains are generally regarded not as offers for unilateral contracts but merely "invitations to treat". Some have criticised

12350-437: The other party to the contract. Contract theory is a large body of legal theory that addresses normative and conceptual questions in contract law. One of the most important questions asked in contract theory is why contracts are enforced. One prominent answer to this question focuses on the economic benefits of enforcing bargains. Another approach, associated with Charles Fried in his book Contract as Promise , maintains that

12480-491: The parties expressly state the opposite. For example, in Rose & Frank Co v JR Crompton & Bros Ltd , an agreement between two business parties was not enforced because an "honour clause" in the document stated "this is not a commercial or legal agreement, but is only a statement of the intention of the parties". In contrast, domestic and social agreements such as those between children and parents are typically unenforceable on

12610-493: The parties have explicitly agreed that breach of that term, no matter what the factual consequences, will entitle the innocent party to terminate the contract for breach; or (5) as a matter of general construction of the contract, the clause must be understood as intended to operate as a condition. In all systems of contract law, the capacity of a variety of natural or juristic persons to enter into contracts, enforce contractual obligations, or have contracts enforced against them

12740-525: The parties to modify the terms governing their obligations to each other. This is reflected in Article 3.1.2 of the Principles of International Commercial Contracts , which states that "a contract is concluded, modified or terminated by the mere agreement of the parties, without any further requirement". Assignments are typically subject to statutory restrictions, particularly with regard to the consent of

12870-448: The perceived disadvantages of whole life—namely that premiums and death benefits are fixed. With universal life, both the premiums and death benefit are flexible. With the exception of guaranteed-death-benefit universal life policies, universal life policies trade their greater flexibility for fewer guarantees. "Flexible death benefit" means the policy owner can choose to decrease the death benefit. The death benefit can also be increased by

13000-504: The person to pay for the policy. The insured is a participant in the contract, but not necessarily a party to it. The beneficiary receives policy proceeds upon the insured person's death. The owner designates the beneficiary, but the beneficiary is not a party to the policy. The owner can change the beneficiary unless the policy has an irrevocable beneficiary designation. If a policy has an irrevocable beneficiary, any beneficiary changes, policy assignments, or cash value borrowing would require

13130-440: The policy is the initial amount that the policy will pay at the death of the insured or when the policy matures , although the actual death benefit can provide for greater or lesser than the face amount. The policy matures when the insured dies or reaches a specified age (such as 100 years old). The insurance company calculates the policy prices (premiums) at a level sufficient to fund claims, cover administrative costs, and provide

13260-420: The policy owner, usually requiring new underwriting. Another feature of flexible death benefit is the ability to choose option A or option B death benefits and to change those options over the course of the life of the insured. Option A is often referred to as a "level death benefit"; death benefits remain level for the life of the insured, and premiums are lower than policies with Option B death benefits, which pay

13390-458: The policy's cash value—i.e., a face amount plus earnings/interest. If the cash value grows over time, the death benefits do too. If the cash value declines, the death benefit also declines. Option B policies normally feature higher premiums than option A policies. The endowment policy is a life insurance contract designed to pay a lump sum after a specific term (on its 'maturity') or on death. Typical maturities are ten, fifteen, or twenty years up to

13520-589: The position as a business concern. Mores married Susannah Bridgman (1730–1767) in 1753. She was the daughter of Richard Bridgman, Mores's stepfather. The couple had two children: a daughter, Sarah, who predeceased her father; and a son, Edward Rowe (1757 - 1846) who was an active magistrate, and deputy Lieutenant for the counties of Middlesex and Essex. Mores, who believed firmly in the superiority of Latin , spoke exclusively in Latin to his children. Mores died on 28 November 1778 at Etlow House, Low Leyton , Essex, of

13650-540: The premiums paid if they outlive the policy. The specific uses of the terms "insurance" and "assurance" are sometimes confused. In general, in jurisdictions where both terms are used, "insurance" refers to providing coverage for an event that might happen (fire, theft, flood, etc.), while "assurance" is the provision of coverage for an event that is certain to happen. In the United States, both forms of coverage are called "insurance" for reasons of simplicity in companies selling both products. By some definitions, "insurance"

13780-517: The principle underlying contemporary negotiable instruments . The hawala system also influenced the development of agency in common law and in civil laws . In Roman law, agents could not act on behalf of other individuals in the formation of binding contracts. On the other hand, Islamic law accepted agency as permissible in not only contract law but in the law of obligations generally, an approach that has since become mainstream in common law, mixed law, and most civil law jurisdictions. Analogously,

13910-447: The promisee. The Indian Contract Act also codifies examples of when consideration is invalid, for example when it involves marriage or the provision of a public office. The primary criticism of the doctrine of consideration is that it is purely a formality that merely serves to complicate commerce and create legal uncertainty by opening up otherwise simple contracts to scrutiny as to whether the consideration purportedly tendered satisfies

14040-422: The promisee. Forbearance to act, for example, can constitute valid consideration, but only if a legal right is surrendered in the process. Common law jurisdictions require consideration for a simple contract to be binding, but allow contracts by deed to not require consideration. Similarly, under the Uniform Commercial Code , firm offers in most American jurisdictions are valid without consideration if signed by

14170-449: The purchaser will actually suffer some kind of loss if the CQV dies. Such a requirement prevents people from benefiting from the purchase of purely speculative policies on people they expect to die. With no insurable interest requirement, the risk that a purchaser would murder the CQV for insurance proceeds would be great. In at least one case, an insurance company that sold a policy to a purchaser with no insurable interest (who later murdered

14300-640: The reign of Elagabalus (218–222) that was included in the Digesta seu Pandectae (533) codification ordered by Justinian I (527–565) of the Eastern Roman Empire . The earliest known life insurance policy was made in Royal Exchange, London on 18 June 1583. A Richard Martin insured a William Gybbons, paying thirteen merchants 30 pounds for 400 if the insured dies within one year. The first company to offer life insurance in modern times

14430-752: The reign of Hadrian (117–138) of the Roman Empire . In 1851, future U.S. Supreme Court Associate Justice Joseph P. Bradley (1870–1892), once employed as an actuary for the Mutual Benefit Life Insurance Company , submitted an article to the Journal of the Institute of Actuaries detailing an historical account of a Severan dynasty -era life table compiled by the Roman jurist Ulpian in approximately 220 AD during

14560-470: The requirements of the law. While the purpose of the doctrine was ostensibly to protect parties seeking to void oppressive contracts, this is currently accomplished through the use of a sophisticated variety of defences available to the party seeking to void a contract. In practice, the doctrine of consideration has resulted in a phenomenon similar to that of Ḥiyal in Islamic contracts, whereby parties to

14690-801: The risks of long-term life assurance policies, after being refused admission to the Amicable Life Assurance Society because of his advanced age. He was unsuccessful in his attempts at procuring a charter from the government . His disciple, Edward Rowe Mores , was able to establish the Society for Equitable Assurances on Lives and Survivorship in 1762. It was the world's first mutual insurer and it pioneered age based premiums based on mortality rate laying "the framework for scientific insurance practice and development" and "the basis of modern life assurance upon which all life assurance schemes were subsequently based". Mores also gave

14820-778: The role of law, the PRC's socialist background, the Japanese/German-based law of the Republic of China on Taiwan , and the English-based common law used in Hong Kong. Consequently, contract law in the Chinese mainland functions as a de facto mixed system. The 2021 civil code provides for the regulation of nominate contracts in a manner similar to that of jurisdictions such as Japan, Germany, France, and Québec. The rules governing contracts vary between jurisdictions. In

14950-438: The sale of a home, the buyer promises to pay the seller $ 200,000 in exchange for the seller's promise to deliver title to the property. Bilateral contracts commonly take place in the daily flow of commercial transactions. Less common are unilateral contracts, in which one party makes a promise, but the other side does not promise anything. In these cases, those accepting the offer are not required to communicate their acceptance to

15080-432: The same overarching purpose of enabling the creation of legally enforceable obligations, they may contain significant differences. Accordingly, many contracts contain a choice of law clause and a forum selection clause to determine the jurisdiction whose system of contract law will govern the contract and the court or other forum in which disputes will be resolved, respectively. Failing express agreement on such matters in

15210-561: The term "represents" in order to avoid claims under the Misrepresentation Act 1967 , while in America the use of "warrants and represents" is relatively common. English courts may weigh parties' emphasis in determining whether a non-contractual statement is enforceable as part of the contract. In the English case of Bannerman v White , the court upheld a rejection by a buyer of hops which had been treated with sulphur since

15340-447: The terms of a contract are so uncertain or incomplete as to elude reasonable interpretation, the parties cannot have reached an agreement in the eyes of the law. An agreement to agree does not constitute a contract, and an inability to agree on key issues, which may include such things as price or safety, may cause an entire contract to fail. However, a court will attempt to give effect to commercial contracts where possible, by construing

15470-401: The theoretical debate in contract is its place within, and relationship to a wider law of obligations . Obligations have traditionally been divided into contracts, which are voluntarily undertaken and owed to a specific person or persons, and obligations in tort which are based on the wrongful infliction of harm to certain protected interests, primarily imposed by the law, and typically owed to

15600-422: The time frame for issuance from weeks or even months to hours or minutes, depending on the amount of insurance being purchased. The mortality of underwritten persons rises much more quickly than the general population. At the end of 10 years, the mortality of that 25-year-old, non-smoking male is 0.66/1000/year. Consequently, in a group of one thousand 25-year-old males with a $ 100,000 policy, all of average health,

15730-404: The tobacco category typically have to pay higher premiums due to higher mortality. Recent US mortality tables predict that roughly 0.35 in 1,000 non-smoking males aged 25 will die during the first year of a policy. Mortality approximately doubles for every additional ten years of age, so the mortality rate in the first year for non-smoking men is about 2.5 in 1,000 people at age 65. Compare this with

15860-552: The transfer of debt , which was not accepted under Roman law, became widely practiced in medieval European commerce, owing largely to trade with the Muslim world during the Middle Ages. Since the nineteenth century, two distinct traditions of contract law emerged. Jurisdictions that were previously British colonies generally adopted English common law . Other jurisdictions largely adopted the civil law tradition, either inheriting

15990-407: The two when Mores discovered that he was not given due credit on the title page. This work was eventually also published in 1783. After James Dodson 's death, Mores became the leader of the group which eventually became the Society for Equitable Assurances on Lives and Survivorship in 1762. He specified that the chief official should be called the actuary, which is the earliest known reference to

16120-732: The various legal traditions closer together. In the early 20th century, the United States underwent the " Lochner era ", in which the Supreme Court of the United States struck down economic regulations on the basis of freedom of contract and the Due Process Clause . These decisions were eventually overturned, and the Supreme Court established a deference to legislative statutes and regulations that restrict freedom of contract. The need to prevent discrimination and unfair business practices has placed additional restrictions on

16250-535: Was a member of the gentry, and had been rector of Tunstall for twenty years. His mother was Sarah Windsor, the daughter of a City merchant . He had one sister, Ann-Catherine. In 1740, Mores's father died leaving a considerable inheritance , and later the same year he entered the Merchant Taylors' School in London . His mother soon remarried, to Richard Bridgman, a grocer of Whitechapel , London, who

16380-614: Was an English antiquarian and scholar , who wrote works on history and typography . He was also instrumental in the founding of The Society for Equitable Assurances on Lives and Survivorships (now commonly known as Equitable Life), and is credited with being the first person to use the professional title actuary in relation to insurance . Edward Rowe Mores was born on 24 January 1731 [NS] at Gore Court in Tunstall near Sittingbourne in Kent . His father Edward Mores (1681–1740)

16510-469: Was elected a fellow of the Society of Antiquaries in 1752, and the following year was elected a member of the society's council. He published his first work, Nomina et insignia gentilitia nobilium equitumque sub Edoardo primo rege militantium (a study of the heraldry of the knights of Edward I ), in 1749, at the age of 19 and when he was still at Oxford. He spent some years working on a projected county history of Berkshire : it remained unfinished, but

16640-399: Was first used in the English case of Smith v Hughes in 1871. Where an offer specifies a particular mode of acceptance, only acceptance communicated via that method will be valid. Contracts may be bilateral or unilateral . A bilateral contract is an agreement in which each of the parties to the contract makes a promise or set of promises to each other. For example, in a contract for

16770-489: Was of increasing importance in the Grocers' Company . Mores entered Queen's College, Oxford in 1746, obtaining a BA in 1750, and MA in 1753. At Oxford, he was renowned for the range and depth of his learning and for his idiosyncrasies . He studied Latin , and spoke it almost exclusively to his daughter when she was young. Besides mathematics , he was interested in such diverse studies as heraldry and architecture. He

16900-529: Was the Amicable Society for a Perpetual Assurance Office , founded in London in 1706 by William Talbot and Sir Thomas Allen . Each member made an annual payment per share on one to three shares with consideration to age of the members being twelve to fifty-five. At the end of the year a portion of the "amicable contribution" was divided among the wives and children of deceased members, in proportion to

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