Combined Tut 201 feedback (Questions & Answers) arranged in descending order from 2022 to 2016. Helps you see questions likely to be asked, and how to answer them. Always helpful for assignments and exam preparation.
The memorandum of this Assessment is based on the Study guide (Learning units
3 & 4) and students were not be penalized if they did not consult the prescribed
textbook.
A reminder to include references in footnotes as well as a bibliography in the
prescribed and consistent style to both questions. Written answers may contain end
notes instead of footnotes.
MARKING GUIDELINES:
1. Identify the types of contracts that share common features with the
insurance contract and substantiate your answer. (Maximum 5)
An insurance contract shares common features with the following contracts, where
the element of uncertainty inherent in the risk is a characteristic feature (1):
• A contract of sale, lease, carriage, deposit or any other contract that
involves the transfer of risk from one party to another. (1) (Max 2 marks for
these examples). [However, an insurance contract is an aleatory contract where
the transfer of risk is the main purpose of the contract whereas the transfer of
risk is not the main purpose of the former examples referred to.]
• A wager (1). Both an insurance contract and a wagering agreement are
aleatory contracts, where the transfer of risk is the main purpose (or
essence) of the contract. (1) [Aleatory contracts refer to contracts where the
obligation(s) of the party/parties is/are conditional upon the occurrence of an
uncertain event; and where there is usually an inequality in the extent or value
of the mutual undertakings. However a wager (which is an agreement and
should therefore be contrasted with gambling, which is a game of chance) is a
, valid contract but, unlike an insurance contract, it is (at least in common law)
an unenforceable contract, therefore the need to distinguish between the two.]
• Motor-vehicle warranties and other manufacturers’ guarantees (1) are also
contracts that involve the risk of one party to another and therefore share
common features with the insurance contract. [However, the risk that is
transferred from the insured to the insurer is one over which the insurer has no
control and there is an independent transfer of risk.]
• Contracts of suretyship (1) are also contracts that involve the risk of one party
to another and therefore share common features with the insurance contract,
especially with credit insurance (where an insurer undertakes to indemnify the
insured if the debtor fails to pay its debt). (1) [However, an insurance contract
is a principal contract, and a suretyship agreement is not.]
[Note: Students had to identify at least two contracts that share common features with
insurance contracts and substantiate their answers. The remainder of the marks may
comprise of the distinguishing features in square brackets. The question did not ask
students to distinguish between these contracts, but students may be credited for
critical insight.]
2. There is a clear difference between an insurance contract, an insurance
policy, and interim insurance (or temporary) insurance. Explain the
difference between these insurance law concepts. (Maximum 5)
An insurance contract is an intangible agreement between insured and insurer (1).
It is a consensual contract (the parties must have meeting of minds) on the essentialia
of the contract of insurance (the obligations they wish to create). (1) [An insurance
contract does not need to be in writing, but its common practice to reduce such
contracts to writing.]
An insurance policy is the tangible document to which (part of) an insurance contract
may be reduced. (1) OR It is a document embodying the insurance contract.
An interim (temporary) insurance contract provides a prospective insured with
insurance cover during the period after the submission of its offer and before
, acceptance or rejection of the offer by the insurer (1) and are a fully fledged (but
temporary/interim) insurance contract. (1) [A cover note is a document that embodies
an interim (temporary) insurance contract. (Possible additional mark if maximum
marks not earned yet.)].
[Note: this is a reminder to not merely provide definitions but the differences between
the THREE concepts.]
[TOTAL: 10]
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