CARD Q009
Which list contains the four basic elements of a valid contract?
- Application, illustration, claim, dividend
- Insurer, agent, adjuster, beneficiary
- Premium, deductible, coinsurance, copayment
- Agreement, consideration, competent parties, legal purpose
Agreement, consideration, competent parties, legal purpose
Agreement means offer and acceptance. The other elements address exchanged value, legal capacity, and a lawful purpose.
Why each choice is right or wrong
A. Application, illustration, claim, dividend
Incorrect. These documents and events are not the four formation requirements.
B. Insurer, agent, adjuster, beneficiary
Incorrect. These are possible participants, not the legal elements.
C. Premium, deductible, coinsurance, copayment
Incorrect. These are payment and cost-sharing terms, not the four legal elements.
D. Agreement, consideration, competent parties, legal purpose
Correct. Agreement means offer and acceptance. The other elements address exchanged value, legal capacity, and a lawful purpose.
Review the related terms
Use these lessons to revisit the concepts and try additional practice questions.