Question

1. Bob, age 5o, wrote to Acme Insurance Company and asked for them to send information regarding the types and prices of life insurance available to him. The company wrote him back and asked that he go to their online web site and fill out a "Health Questionnaire." Bob went to the website and responded to the questionnaire. Al theme. Bohada cancerous tumor in his lung. He did not know this and responded 'No' to the question "Do you have Cancer?" After reviewing the responses to the questionnaire, Acme mailed to Bob an offer of $250.000 life insurance for the price of $500 per year. Bob received the letter on July 1st and malled the form, with his check on July om The company received the form and the check on July 14th. On July 7th, Bob was hit by a bus and died. Bob's wife has claimed the insurance. Acme has refused to pay claiming (1) That Bob died before the offer was accepted and (2) that Bob incorrect answer to the question about Cancer constituted a misrepresentation allowing them to void the contract is Acme correct? Explain your answer discussing all of the elements necessary to contract formation

Answer 1

There are two elements of the given case, first whether the offer was accepted or not and second whether Bob provided the incorrect information about his cancer may cause the contract to be void.

When we talk about the existence of the offer acceptance, then as per the mail-box rule, the offer is deemed to be accepted as soon as the confirmation is sent through the mail. As the check and form were dispatched by Bob on 6th July, there was a contract between the company and Bob.

When we talk about the cancer term Bob was required to be sure about the status of his cancer and this can be done by going for the medical examination. Any false representation of health-related information in the insurance policy leads to the void contract between the company and the client.

So on the first case, Acme was incorrect as the contract was formed as soon as he check and form was dispatched by Bob but in the second case of cancer, the company was correct to state that the contract became void due to misinformation provided by Bob about the status of his cancer,