IntroductionWhatis a contract?A contract can bewell-defined as a legally enforceable promise but requires the presence ofthree elements to be met before it can be enforced in the eyes of law. Itshould be first, established between proficient parties who have the legal abilityto contract. An intent should also be present between the parties to form legalrelations. There should be an offer andacceptance as well where the offeree shows a clear intent to accept the offer thatwill then establish a full agreement.
There must also be consideration supportedfor the document to have legal binding.Descriptionof chosen contract.The choice of mycontract is an insurance contract on Medshield life with NTUC Income.The contract includesterms on claims, schedule of benefits. Generally, the document list down all informationprovided by NTUC Income on my policy matters which I am covered under. Insurance policyis generally an integrated contract, meaning that it consists of all forms ofterms and conditions related with the contract between insured and insurer.
One term or exemption clauseExemption clauseis a settlement in a contract that clearly exclude a party from liability orrestrict the amount of liability of the party to specific conditions. As exemption clauses can be abused and appliedto a party’s disadvantage, as such, changes to the law in creating more impartialityand to limit the usage of such clauses are imposed.Following arethree ways in which an exemption clause can become part of a contract:1. Incorporationby signature2. Incorporationby notice3. Incorporationby previous course of dealing.
During the transactionto purchase an insurance policy, an offer and acceptance took place when theinsurance company made an offer and I accepted the offer when I decided on theinsurance policy with NTUC Income. In the declaration form for replacing the existingintegrated shield plan, the document indicates that the existing coverage thatis currently covered by my present plan on any existing medical conditions, maynot be covered in the new insurance plan and that I am aware of this clause.The above isexemption clause in part of the contract, which I have read and signed. Law applicable to my contract described Under theincorporation by signature:As soon as acontract is confirmed in writing, endorsed by both parties, the terms andconditions, including any exemption clause stated in the document are part ofthe contract. The signee once his signature is endorsed on the document, willbe bounded even if he has not read the contract or does not comprehend thecontents in the document.Inreference to my case, my insurance adviser has clearly informed me of the consequencesassociated with the replacement or switching of the insurance policy that I havesigned.
The new policy may offer lower level of benefits and more expensive onthe premium, if not at the same cost, or offering the same level of benefitwith higher premium and eventually, the new policy may be less suitable for me. ReflectionAs much as Idisagree and find it unfair thatreplace existing integrated shield plan may result in losing coverage on anycurrent medical conditions that are covered presently on the declaration form,it is clearly drafted in the contract without any hidden agenda. Hence, I haveto abide and accept the terms and conditions as soon as I have signed on theagreement.
However, there is also a fair practise of a cool off period which isin placed in the event that I have decided to withdraw from the policy within astipulated time despite the agreement has been signed. This is the final levelof protection for the interest of some people who may not have fully understoodthe contract and medical terms of their own health conditions. Conclusion:In the field of contract law, it is frequent that the party whois involve in the transaction may find himself in a situation where he feelsthat it is unfair at some point of time. This is common in the fundamental principleof freedom to contract.
However, in contractual relationships, fairness usuallybecomes unrelated as the critical factor is what has been decided instead ofwhat is fair. Nevertheless, there is still some level of fairness in a contractbut the final outcome that is agreed may not be what one has expected.