BCP CH 5 Law of Contract & Agency

A collection of vocabulary flashcards focusing on key legal concepts within the context of contract law and agency in insurance.

Contract

An agreement enforceable by law, which involves a promise or set of promises.

Intention to Create Legal Relationship

The intention of parties to enter into a legal relationship that can be enforced in law.

Offer & Acceptance

The mutual agreement between parties, where one party makes an offer and the other party accepts it unconditionally.

Consideration

Something of value received by a promisor from a promisee, essential for a contract to be enforceable.

Capacity to Contract

The legal ability of a person to enter into a contract, typically requiring legal age and mental competency.

Misrepresentation

A false statement that induces another party to enter into a contract, making it voidable.

Duress

Coercion that makes a contract invalid due to the absence of genuine consent.

Undue Influence

When one party takes advantage of a position of power over another party, affecting their ability to make a free choice in forming a contract.

Illegal Contract

A contract that is prohibited by statute or public policy, rendering it void.

Mistake

A misunderstanding or lack of knowledge regarding a fundamental fact of a contract at the time of agreement.

Agency

A relationship where one person (the agent) acts on behalf of another (the principal) to create legal relations with third parties.

Actual Authority

The authority explicitly granted to an agent by the principal.

Apparent Authority

Authority that a third party perceives an agent to have, based on the principal's representations.

Termination of Agency

The end of the agency relationship, which can be due to various actions or events affecting either party.