2.1 General rules of law

The rules of law governing the formation of contracts of insurance are those which govern the formation of most other contracts.1 Generally contracts are made when the offer of one party, typically called the offeror, is accepted by the other party; and contracts of insurance are made when the offer of one party, typically the applicant for insurance, is accepted by the other party, the insurer. Commonly, however, the applicant first obtains a prior quotation from the insurer which, in the language of contract law, is not an offer but an “invitation to treat”. If then the applicant “accepts” the quotation by completing the insurer’s application form on that basis, the form is the offer to be accepted (or not) by the insurer.