UNIT 9
CONCLUSION OF INSURANCE CONTRACTS
REQUIREMENTS FOR THE CONCLUSION OF A VALID
INSURANCE CONTRACT
1. CONSENSUS
- Must be consensus on the essentialia of contract
- Insurer mostly issues invitations in the form of advertisements to
potential insureds to do business with the specific insurer
- The offer for insurance is usually made by the insured, who
completes a standard application form in hard copy or electronically
- It is possible that the initial offer is actually made by the insurer, or
that the insurer makes a counter-offer
- The contract between them only exists once they have reached
consensus on the terms and conditions of their agreement
- Have to look at consensus together with how to info is provided to
insurer
- Definition of Direct marketing*
- It is an offer and acceptance that needs to be made
- RULE 4 (changed from 30 days to??
- Each renewal or reinstatement of a contract is a new contract of
insurance
- If the insurer sends a renewal notice to the insured at the end of an
insurance term, it constitutes a new offer for insurance
- The acceptance can be made orally or through conduct
- If the insured, after the first contract has been terminated,
continues to pay his premiums, his conduct indicates his acceptance
of the renewal offer and a new insurance contract is concluded
- Re-instatement for long term insurance occurs where the insured
lapses in aying premiums and he elects to continue with the
insurance
2. CONTRACTUAL CAPACITY
- Parties must possess the required contractual capacity to be able to
conclude a valid contract of insurance
- Persons married in community of property may only deal with their
insurance policies after obtaining the required consent from the
other spouse according to the provisions of the Matrimonial Property
Act.
, - Except where the insured goods are excluded from the communal
estate
- SECTION 14 & 15 ***
3. LEGALITY
- Must be legal
- Not contrary to any statutory law, good morals or public policy
- Where a provision in the contract is unlawful and severable from the
rest, the specific provision is deemed to be pro non scripto (left
out), yet the rest remains unaffected
- In terms of the Promotion of Equality and the Prevention of Unfair
Discrimination Act, an insurance contract may not unfairly
discriminate against a person by:
a) Unfairly refusing on a prohibited ground to provide an
insurance policy to any person
b) Unfairly discriminating in the provision of benefits, facilities
and related insurance services and
c) Unfairly disadvantaging a person or persons including refusing
to grant insurance and related services to persons on the
basis of their HIV/AIDS status
- RULE 70 of PPP
- RULE 71 of PPP
- With a wager and a gamble, the parties lack an interest and create
their own risk in a so-called contract of chance
- The wager remains a natural obligation and is unenforceable
irrespective of any loss suffered, whereas an insurance contract
creates a civil obligation that is enforceable
- With insurance contract – risk is passed from the insured to the
insurer, with wagering – no risk is passed from one party to another
- Gambling is illegal and such contracts are void (exception- casino)
4. POSSIBILITY AND CERTAINTY
- Be objectively possible to perform
- An insurable interest which has ceased to exist at the time of
conclusion of the contract, cannot be insured in future
- E.G: has to be your car to insure it..
5. FORMALITIES
- No general prescribed statutory formalities
- Parties may prescribe their own formalities
- PPP require contracts whereas verbal or written to be in plain
language
CONCLUSION OF INSURANCE CONTRACTS
REQUIREMENTS FOR THE CONCLUSION OF A VALID
INSURANCE CONTRACT
1. CONSENSUS
- Must be consensus on the essentialia of contract
- Insurer mostly issues invitations in the form of advertisements to
potential insureds to do business with the specific insurer
- The offer for insurance is usually made by the insured, who
completes a standard application form in hard copy or electronically
- It is possible that the initial offer is actually made by the insurer, or
that the insurer makes a counter-offer
- The contract between them only exists once they have reached
consensus on the terms and conditions of their agreement
- Have to look at consensus together with how to info is provided to
insurer
- Definition of Direct marketing*
- It is an offer and acceptance that needs to be made
- RULE 4 (changed from 30 days to??
- Each renewal or reinstatement of a contract is a new contract of
insurance
- If the insurer sends a renewal notice to the insured at the end of an
insurance term, it constitutes a new offer for insurance
- The acceptance can be made orally or through conduct
- If the insured, after the first contract has been terminated,
continues to pay his premiums, his conduct indicates his acceptance
of the renewal offer and a new insurance contract is concluded
- Re-instatement for long term insurance occurs where the insured
lapses in aying premiums and he elects to continue with the
insurance
2. CONTRACTUAL CAPACITY
- Parties must possess the required contractual capacity to be able to
conclude a valid contract of insurance
- Persons married in community of property may only deal with their
insurance policies after obtaining the required consent from the
other spouse according to the provisions of the Matrimonial Property
Act.
, - Except where the insured goods are excluded from the communal
estate
- SECTION 14 & 15 ***
3. LEGALITY
- Must be legal
- Not contrary to any statutory law, good morals or public policy
- Where a provision in the contract is unlawful and severable from the
rest, the specific provision is deemed to be pro non scripto (left
out), yet the rest remains unaffected
- In terms of the Promotion of Equality and the Prevention of Unfair
Discrimination Act, an insurance contract may not unfairly
discriminate against a person by:
a) Unfairly refusing on a prohibited ground to provide an
insurance policy to any person
b) Unfairly discriminating in the provision of benefits, facilities
and related insurance services and
c) Unfairly disadvantaging a person or persons including refusing
to grant insurance and related services to persons on the
basis of their HIV/AIDS status
- RULE 70 of PPP
- RULE 71 of PPP
- With a wager and a gamble, the parties lack an interest and create
their own risk in a so-called contract of chance
- The wager remains a natural obligation and is unenforceable
irrespective of any loss suffered, whereas an insurance contract
creates a civil obligation that is enforceable
- With insurance contract – risk is passed from the insured to the
insurer, with wagering – no risk is passed from one party to another
- Gambling is illegal and such contracts are void (exception- casino)
4. POSSIBILITY AND CERTAINTY
- Be objectively possible to perform
- An insurable interest which has ceased to exist at the time of
conclusion of the contract, cannot be insured in future
- E.G: has to be your car to insure it..
5. FORMALITIES
- No general prescribed statutory formalities
- Parties may prescribe their own formalities
- PPP require contracts whereas verbal or written to be in plain
language
