1
PRATIMA A OSTWAL
INSURANCE CONTRACT
PRATIMA A OSTWAL
2
INSURANCE AS A CONTRACT
PRATIMA A OSTWAL
PRATIMA A OSTWAL
3
PRATIMA A OSTWAL
PRATIMA A OSTWAL
4
PRATIMA A OSTWAL
PRATIMA A OSTWAL
5
PRATIMA A OSTWAL
PRATIMA A OSTWAL
6
1. Offer & Acceptance
2. Consideration PRATIMA A OSTWAL
3. Legal capacity to contract or
competency
PRATIMA A OSTWAL
4. Consensus “ad idem”
5. Legality of object
7
1.
OFFER &
ACCEPTANCE:
In Life Insurance an offer can be
made either by the Insurance
company or the applicant (proposer) &
the acceptance will PRATIMA A OSTWAL
follow. e.g., subsequently
(a) An offer made by the Insurance
company to proposer that
the premium amount will be Rs.100/-
per annum for the
Insurance amount of Rs.1000/-. It is
for the proposer to
PRATIMA A OSTWAL
accept the offer or not.
8
PRATIMA A OSTWAL
PRATIMA A OSTWAL
9
PRATIMA A OSTWAL
PRATIMA A OSTWAL
10
3. LEGAL CAPACITY TO CONTRACT OR COMPETENCY:
For an agreement to be binding on all parties, the parties
involved must have the legal capacity to enter into a contract.
With respect to the insurer, if the company is formed as per laws
of the country & empowered to solicit insurance then the insurer
is capable of entering into an agreement. PRATIMA A OSTWAL
With respect to the insured, the person should be of legal age i.e.
18 years and of sound mind. If a contract is made with an
underage the application may be held unenforceable if the minor
decides to repudiate it at a later date. In Insurance contract the
insurer is bound by the contract as long as the underage wishes to
PRATIMA A OSTWAL
continue it. If the minor repudiates his contract, the law will allow
him a refund of all premium paid
11
PRATIMA A OSTWAL
PRATIMA A OSTWAL
12
PRATIMA A OSTWAL
PRATIMA A OSTWAL
13
PRATIMA A OSTWAL
PRATIMA A OSTWAL
14
PRATIMA A OSTWAL
PRATIMA A OSTWAL
15
PRATIMA A OSTWAL
PRATIMA A OSTWAL
16
PRATIMA A OSTWAL
PRATIMA A OSTWAL
17
PRATIMA A OSTWAL
PRATIMA A OSTWAL
18
PRATIMA A OSTWAL
PRATIMA A OSTWAL
19
CONTRACT OF INDEMNITY
UNITED INDIA INSURANCE CO. LTD VS
M.K.J. CORPORATION (1996)
•Principle: Insurance (except life insurance)
is a contract of indemnity. The insured cannot
profit from insurance but only recover actual
loss PRATIMA A OSTWAL
PRATIMA A OSTWAL
20
PRATIMA A OSTWAL
PRATIMA A OSTWAL
21
PRATIMA A OSTWAL
PRATIMA A OSTWAL
22
PRATIMA A OSTWAL
PRATIMA A OSTWAL
23
PRATIMA A OSTWAL
PRATIMA A OSTWAL
24
PRATIMA A OSTWAL
PRATIMA A OSTWAL
25
PRATIMA A OSTWAL
PRATIMA A OSTWAL
PRATIMA A OSTWAL
26
27
WAGERING CONTRACT
CONTRACT OF WAGER
A wager means a bet. The subject matter of bet may be anything. It is a
game of chance in which the event of either gain or loss, is wholly
dependent on an uncertain event.
PRATIMA A OSTWAL
Sir William Ansons defines it as : "a promise to give money's worth
upon the determination or ascertainment of an uncertain event.“
In the words of Cockburn, C.J. :
"it is a contract by A to pay to B on the happening of a given event in
consideration of B’s promise to pay money to A on the event not
PRATIMA A OSTWAL
happening."
28
LEGAL PERSPECTIVE:
Section 30 of the Indian Contract Act governs agreements that
depend on uncertain events, such as wagering contracts. A
wagering contract involves a mutual agreement between parties to
exchange money or its equivalent contingent upon the occurrence
or non-occurrence of an uncertain event.
PRATIMA A OSTWAL
Section 30 deems wagering contracts void and unenforceable in
India. This stance stems from the recognition that such contracts
promote gambling and speculation without substantial
consideration other than monetary gain. Consequently, legal
PRATIMA A OSTWAL
remedies are not available to enforce these agreements.
29
PRATIMA A OSTWAL
Insurance is a valid contract of indemnity, not a wagering
contract. While both involve uncertain future events,
insurance is based on insurable interest, utmost good faith,
PRATIMA A OSTWAL
and risk management, whereas wagering contracts are mere
bets dependent on chance and are legally void in India.
30
PRATIMA A OSTWAL
PRATIMA A OSTWAL
31
PRATIMA A OSTWAL
PRATIMA A OSTWAL
PRATIMA A OSTWAL
32