Basis for Valid Insurance Contract

Essentials of a Valid Contract

1. Free Consent
2. Legality of Object
3. Lawful Consideration
4. Offer and Acceptance
5. Capacity of Parties to Contract
6. Capability of being Performed
7. Consensus ad idem (the parties to the contact must be of the same mind regarding the subject matter of the contract)

These are the main basic principles for any kind of contract. But as due to the nature of the Insurance contract, Insurance contracts are subjected to 2 additional principles

1. Principle of Utmost Good Faith
2. Principle of Insurable Interest

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