Question

2.  We discussed the legal characteristics of insurance contracts:  unilateral contracts, personal contracts, aleatory contracts, contracts of adhesion, and personal contracts.  Which one of these characteristics is illustrated by each of the following?   (half-point each)

a.  Lynn wants to purchase a used car.  The seller just purchased auto insurance, and offered to “throw in” the paid-up auto insurance to “sweeten the deal.”  The seller’s auto insurance, however, will not cover Lynn unless the insurer approves.

Aleatory

b.  Jed, age 54, paid his auto insurance premiums faithfully for 32 years and never had a claim.  Ed, age 20, purchased a new car and bought auto insurance.  Three days later, the car was stolen and never recovered.  His insurer paid Ed the value of the car that was stolen, $40,000.

c.  Georgia Lee purchased a homeowner policy providing coverage for one year.  She agreed to make quarterly installment premium payments.  Georgia Lee got laid off from work after paying the first premium.  She can’t afford the other premium payments.  Her insurer, however, cannot sue her for non-payment of premium

Answer 1

A) Personal contract: It can describe a contract that binds only a single individual as opposed to a group or company that the person represents. It can also refer to a contract that only binds the single person and not their heirs, successors, or assignees.

B) Aleatory Contract : An aleatory contract is an agreement whereby the parties involved do not have to perform a particular action until a specific, triggering event occurs.

C) Aleatory Contract : Because neither parties were aware of what was going to happen, untill the trigger event "Being fired": took place, all that will happen is that her policy could lapse