Explain five conditions that would be fulfilled in order for an insurance contract to operate legally
ANSWER
- It must be for a legal purpose. You can not insure prohibited activities or properties e.g chang’aa, bhang, cocaine etc.
- The parties must have legal capacity to contract. Age, financial ability and mental state are considered.
- The terms and conditions of the contract must be acceptable to both the insured and the insurer. For insurance, the insured makes an offer by filling in an application form.
- There must be a a payment and a consideration. The payment is in form of premiums while a consideration is the insurance cover the insured gets from the insurance company.
