Risk Management for Enterprises and Individuals (open textbook), section 9.03: Requirements of a Contract
Edition and licensing notes
Publisher. LibreTexts Business (biz.libretexts.org), from the open textbook of the University of Minnesota Libraries / Saylor (Baranoff, Brockett and Kahane)
Edition. CC BY-NC-SA 3.0 open textbook, ca. 2009-2012; page as served 2026-09-29
Status. Creative Commons Attribution-NonCommercial-ShareAlike 3.0 (LibreTexts / University of Minnesota Libraries).
What this document is
Risk Management for Enterprises and Individuals (open textbook), section 9.03: Requirements of a Contract is a reference published by LibreTexts Business (biz.libretexts.org), from the open textbook of the University of Minnesota Libraries / Saylor (Baranoff, Brockett and Kahane). It is one of the documents that insurance license exam questions are written from, including property & casualty practice questions. This page summarizes it and points to the official version, which is the text to rely on.
Sections cited in practice questions
Each practice answer shows the exact passage it comes from. These are sections of this document that questions cite, with a short excerpt from the source text.
- Risk Management for Enterprises and Individuals, section 9.3, "Requirements of a Contract"
“For any such agreement to be legally enforceable, it must meet the following minimum requirements: There must be an offer and an acceptance There must be consideration The parties to the contract must be competent Its purpose must be legal The contract must be in legal form”
- Risk Management for Enterprises and Individuals, section 9.3, "Consideration"
“In many cases, insurance contracts stipulate that the consideration is both in the form of premium and certain conditions specified in the policy.”
- Risk Management for Enterprises and Individuals, section 9.3, "Offer and Acceptance"
“If the party to whom the offer was made requests a change in terms, a counteroffer is made, which releases the first offerer from the terms of the original offer.”
- Risk Management for Enterprises and Individuals, section 9.3, "Competent Parties"
“A minor who enters into an insurance contract, therefore, may void it during infancy or when he or she reaches majority. Ratification of a policy at the age of majority can be accomplished (by oral or written communication) either explicitly or implicitly (by continuing the policy).”
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