This is an agreement between two or more parties which has legal consequences and is therefore legally enforceable.
CONDITIONS FOR IT TO BE VALID.
- It must be for a legal purpose-not ones that are prohibited law e.g. bhang
- The parties must have legal capacity to contract i.e. not under 18, insane,bankrupt,or lacking legal capacity to contract.
- The terms and conditions of the contract should be acceptable to both insured and the insurer.
There must be a payment and a consideration-The payment is usually inform of premiums paid the insured while the consideration is the insurance cover that the insured gets from the insurer.