Business Law Unit 6

Insurance

A contract whereby a party transfers a risk of financial loss to the risk bearer (insurance company) for a fee.

Insured

Person protected against the loss.

Beneficiary

Person who receives the proceeds of life insurance.

Policy

Written contract of insurance.

Premium

Consideration paid by the insured.

Underwriter

Company writing insurance.

Face

The maximum the insurer pays for a loss.

Risk or peril

The danger of a loss of, or injury to, property, life or anything else.

Rider

Addition to the insurance policy that modifies, extends, or limits the base contract. Must be clearly incorporated in, attached to, or referred to in the policy.

Binder

Temporary contract of insurance until the company investigates the risk and issues a formal policy.

Insurable interest

The policyholder has an interest in the nonoccurence of the risk insured against, usually because there would be financial loss.

Concealment

A willful failure to disclose pertinent information by the insured to the insurer.

Representation

Oral or written misstatement of a material fact by the insured prior to the finalization of the contract.

Warranty

Statement or promise of the insured that relates to the risk and appears in the contract or another document incorporated in the contract.

Subrogation

The right of the insurer under certain circumstances to assume the legal rights of or to “step into the shoes” of the insured.

Estoppel

One party leads the second to a false conclusion the second relies on; the second party would be harmed if the first party were later allowed to show the conclusion to be false.

Life, property, automobile

What are the 3 most common types of insurance?

Real property

Land and those objects permanently attached to land.

Fee simple estate

Absolute ownership of the property and entitles the owner to all rights of the property, which are only redirected by law or private restrictions.

Life estate

A freehold estate where ownership is limited to the duration of some person’s lifetime.

Deeds

Writing conveying title to real property.

Title

Evidence of ownership of property.

Abstract of title

In real estate, a brief history of the ownership of a piece of property.

Lien

A claim or charge against property for payment of some debt.

Deed of trust

A deed that transfers property to the trustee for the benefit of the creditor.

Joint tenancy

Special ownership by two or more parties of the same property with equal rights to keep or dispose of.

Tenancy in common

Special ownership of real property by two or more parties possessing the same property at the same time.

Tenancy by the entireties

A form of joint ownership that can be used only by a husband and wife.

Restrictive covenant

A provision in a deed limiting the use of the property.

Fixed term

This type of lease agreement has a specific starting and ending date which is decided by both the landlord and tenant.

Periodic lease

A tenancy that does not have a specified end date. Will be regarded as a month to month lease in most jurisdictions.

Lost property

When the owner, through negligence or accident, unintentionally leaves property somewhere. The Individual finder can keep the property until the owner comes forward

Abandoned property

When the owner discards property with no intention of reclaiming it.

Mislaid property

Even the owner intentionally let the property out of their possession with the intent to recover it but later forgot to retrieve it or forgot where it was placed.

Lease

The contract or agreement between the landlord and tenant.

Rent

The amount that the tenant agrees to pay the landlord for the possession of a leased property.

No Property Theory (ecclesiastical)

The dead human body was within the exclusive control of the church. Courts developed the principle that no individual had property rights in the dead human body.

Property Theory

The legal bundle of rights recognized in an object.

Quasi-property Theory

The current accepted theory of the legal status of a dead human body.

Life tenant

The person owning for the lifetime of a life estate.

Mortgage

An interest in real estate given to secure the payment of a debt.

Deed of trust

Deed that transfers property to the trustee for the benefit of the creditor.

Personal property

Anything that may be owned that is movable property.

Purchase

Ownership most commonly occurs through what?

Gift

A transfer made without consideration in return.

Donor

The person making a gift.

Donee

The person receiving the gift.

Secured claim

A debt which is supported by a pledge, mortgage or lien on assets belonging to the debtor.

Debtor

A person or entity that owes money to another.

Freehold estates

Estates in which there is ownership of real property.

Non-freehold estates

Estates that involve the leasing, but not ownership of real property.

Freehold and non-freehold

The two most common types of estates in real property are what?

Joint tenancy, tenancy in common, tenancy by the entirety

What are the 3 possible forms of tenancy with respect to the ownership and possession of real property by two or more individuals.

Unity of time

The property interest must be attained by all of the tenants at the same time.

Unity of title

The property interests for all tenants must all be contained in the same instrument, such as a deed or title.

Unity of interest

All tenants must have the same interest type.

Interests

Rights, claims, or privileges an individual has toward real estate.

Unity of possession

All tenants must have the right to possess the whole property.

Tenancy for years, periodic tenancy, tenancy at will, tenancy at sufferance

What are the 4 types of tenancy that may exist by agreement between a landlord and a tenant for the lease of real property?

Tenancy at will

Interest in real property that continues indefinitely.

Tenancy at sufferance

When a tenant does not leave the premises after the tenancy expires.

Tenancy for years

Right to occupy real property for a definite or fixed period of time.

Periodic tenancy

A tenancy that continues for successive fixed periods.

Waste

The unreasonable or improper use of real property by a person who has legal possession of the property.

Voluntary waste

Occurs when the tenant intentionally acts with the result being damage to the property, such as intentionally breaking a window or damaging woodwork.

Permissive waste

Exists when a tenant fails to act to prevent damage or harm to the real property, either physically or financially.

Ameliorating waste

Occurs when a tenant makes unauthorized improvements, renovations, or alterations to the real property, even if those changes increase the value of the property.

Gross negligent act

The intentional failure or the reckless disregard of the consequences with respect to conduct affecting the life or property of another.

Liability

Responsibility for actions and/or other debts; the quality or state of being legally obligated or accountable.

Statement of Funeral Goods and Services Selected

An itemized list of goods and services that a consumer has selected during an arrangement conference that allows them to evaluate the selections and make any desired changes.

Donor had required intent, property was delivered to donee, donor accepted gift

What are the 3 elements to establish a legal gift?