In our continuing series of questions Julian Hall asks you to test your knowledge on contract law and other legal aspects of insurance

' In our businesses, we need a basic understanding of the law that underpins our work and governs the relationship between insured and insurers. This course introduces the English legal system and specifically examine the English law of contract.

The objectives of the course are to be able to:

  • Demonstrate an understanding, in overview, of how the English law of contract relates to insurance
  • Outline how English law is classified
  • Outline how a contract is formed
  • Describe the seven essential elements that make a contract legally binding.
  • The law is a body of rules that govern how we behave in our society and therefore, should reflect the views of society as to what is right or wrong. These rules of law are reinforced by penalty or punishment if we break them.

    English law originated from ancient local customs and rules that were administered by local landowners. Following the Norman invasion in 1066, these were embodied into a system of law that applied to the whole country - the common law.

    The Normans did not codify the common English law and it continues to grow and develop reflecting the changing needs of society as different cases are brought before the courts. We call this an uncodified system of law, or case law.

    Case law comprises laws 'made' by the courts when considering cases. Higher courts' decisions are then applied in similar cases in lower courts - this is known as judcial precedent.

    In case law there are two systems that work alongside each other. These are common law and equity.

    Equity can be traced back to the middle ages when the King's Chancellor created a court that mitigated the inflexibility of the common law. The courts of equity supported common law by requiring individuals to act with conscience and fairness.

    Since the Supreme Court of Justice Acts (1873-75), the two systems of justice have been administered by the same courts. The difference between the two is that each system recognises different rights and has its own remedies.

    Common law rights are absolute - if you can prove you have a right recognised by common law you are absolutely entitled to a remedy, principally damages (compensation).

    Equity includes remedies such as specific performance, that is,. ordering someone to do, or not do, something. Equitable rights are discretionary: the court decides whether or not to enforce the rights using established principles or 'maxims'.

    From time to time, the law in a certain area may be brought together and codified to allow easier interpretation. For example, before 1906 there were many cases concerning marine insurance and these were codified under an act of Parliament the Marine Insurance Act (1906).

    So far, we have seen that English law has a number of key sources including local custom, case law, common law, equity and acts of parliament. Today, there is another source of law, which is superior to these - EU law.

    ' AXA Campus is an ideal learning tool as it provides over 380 courses and incorporates tailored versions of CII ed Learn and ed Assess (AXA ed).

    This relationship provides a natural fit between the soft and technical learning material of AXA Campus and the qualification and compliance aspects of AXA ed.

    This week's questions come from the AXA Campus course Contract Law and Other legal Aspects of Insurance.

    This course is of interest to anyone new to insurance or wishing to refresh their knowledge of contract law and the legal aspects of insurance.

    The questions for this course are supplied to AXA Insurance by Searchlight Solutions. IT

    If you are interested in using AXA Campus email: julian.hall@axa-insurance.co.uk .