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    3.5 Contract Types

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    Anita Joshi
    This document discusses different types of insurance contracts. It states that insurance contracts are aleatory, executory, synallagmatic, bilateral, and conditional in nature. It provides definitions and examples for each type. Insurance contracts impose reciprocal obligations on the insurer and insured. They are considered executed when a loss occurs and payment is made, but remain executory for the insurer until payment. Most insurance contracts are contracts of indemnity but some like life insurance pay a pre-decided amount. Insurance contracts also tend to be adhesion, with standard terms not open to negotiation.

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    3.5 Contract Types

    Uploaded by

    Anita Joshi
    91 views3 pages
    This document discusses different types of insurance contracts. It states that insurance contracts are aleatory, executory, synallagmatic, bilateral, and conditional in nature. It provides definitions and examples for each type. Insurance contracts impose reciprocal obligations on the insurer and insured. They are considered executed when a loss occurs and payment is made, but remain executory for the insurer until payment. Most insurance contracts are contracts of indemnity but some like life insurance pay a pre-decided amount. Insurance contracts also tend to be adhesion, with standard terms not open to negotiation.

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    This document discusses different types of insurance contracts. It states that insurance contracts are aleatory, executory, synallagmatic, bilateral, and conditional in nature. It provides definitions and examples for each type. Insurance contracts impose reciprocal obligations on the insurer and insured. They are considered executed when a loss occurs and payment is made, but remain executory for the insurer until payment. Most insurance contracts are contracts of indemnity but some like life insurance pay a pre-decided amount. Insurance contracts also tend to be adhesion, with standard terms not open to negotiation.

    Copyright:

    © All Rights Reserved
    Download as RTF, PDF, TXT or read online from Scribd
    Download as rtf, pdf, or txt
    91 views3 pages

    3.5 Contract Types

    Uploaded by

    Anita Joshi
    This document discusses different types of insurance contracts. It states that insurance contracts are aleatory, executory, synallagmatic, bilateral, and conditional in nature. It provides definitions and examples for each type. Insurance contracts impose reciprocal obligations on the insurer and insured. They are considered executed when a loss occurs and payment is made, but remain executory for the insurer until payment. Most insurance contracts are contracts of indemnity but some like life insurance pay a pre-decided amount. Insurance contracts also tend to be adhesion, with standard terms not open to negotiation.

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    Different Types of Contract

    Insurance Contract
     A contract of insurance is in its nature:
     (i) Aleatory,
     (ii) Executory,
     (iii) Synallagmatic,
     (iv) Bilateral
     (v) Conditional
    Types of Insurance Contract
     1. Aleatory –
     wherein the element of chance enters –
     (i) one party may receive much more in value than he gives
     (ii) it depends upon a contingency which may or may not
    occur.
    Types of Insurance Contract
     An aleatory contract is opposed to
    a “Commutative” contract
     Because in a “commutative” contract, there is an exchange
    of almost equivalent values.
    Types of Insurance Contract
     2. Executory –
     in the sense that
    it is not executed until payment of a sum is paid after an
    anticipated loss.
     The contract is deemed as executed on payment of the sum
    assured – when the insured contingency takes place.
     (Executory – not yet executed)
    Types of Insurance Contract
     Executory –
     However, in a life insurance contract –
     on payment of the premium, the contract is deemed as
    executed on the part of the insured.
     But it remains ‘executory’ as to the insurer until payment of
    the sum assured is made on happening of the insured
    contingency.
    Types of Insurance Contract
     3. Synallagmatic –
     A contract which imposes reciprocal obligations on the
    insurer and the insured.
     A synallagmatic contract is a contract in which each party
    to the contract is bound to provide something to the other party.
    Its name is derived from the Ancient Greeksynallagma, meaning
    mutual agreement. Examples of synallagmatic contracts include
    contracts of sale, of service, or of hiring.
    Types of Insurance Contract
     4. Bilateral:
     Insurance contracts are bilateral
     being in the nature of mutual agreements imposing
    obligations of a reciprocal nature.
    Types of Insurance Contract
     5. Conditional –
     it depends upon compliance of certain conditions such as -
     payment of premium, communication of material facts.
    Some Other Types of Insurance Contract
     Some other types of insurance contract:
     (i) Indemnity:
     Most of the general insurance contracts are contracts of
    indemnity
     But not Life insurance and some general insurance
    contracts,
    where pre-decided amount is paid on happening of the
    insured contingency.
    Some Other Types of Insurance Contract
     (ii) Adhesion:
     Except a few minor changes, there is no bargaining as to
    the terms and conditions of the contract –
     the insured has to adhere to the terms and conditions fixed
    by the insurer.
    Some Other Types of Insurance Contract
     (iii) Unilateral –
     an enforceable promise of one party only (the insurer).
     The other party (the insured) makes no promise to keep it
    (to pay the premiums).

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