Multiple choice general knowledge

What is consideration?

  1. The law of insurance

  2. A promise made by one party to the other

  3. The binding force in any contract

  4. An insurance company located in another state
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Consideration is the binding force in any contract - the exchange of value that makes a contract enforceable. In insurance, this is the premium paid by the insured in exchange for the insurer's promise to cover losses. A promise alone (B) is not consideration without exchange. Insurance law (A) and company location (D) are unrelated to consideration as a legal concept.

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