Q394
Which element of a valid contract deals with premium?
A.
Offer and acceptance
B.
Consideration
AnswerC.
Free consent
D.
Capacity of parties to contract
Answer: Option B
Solution
Answer: Option B
Solution:
Consideration of a valid contract deals with premium. A consideration is an exchange of money for the guarantee of an act preformed or another benefit provided. In the context of insurance, the insurance company gives the consideration of coverage for losses as long as premiums are paid.