What are the legal requirements for an insurance contract?

In Maryland, any insurance contract must abide by certain legal requirements in order to be valid and enforceable. First, both parties entering into the insurance contract must possess the legal capacity to enter into a contract. In other words, the parties must be competent individuals or entities who have the ability to make a legally binding agreement. Next, there must be a valid consideration given by each party involved in the contract. A valid consideration is a payment or promise to pay a sum of money or some other form of benefit, or a relinquishment of a legal right. Both parties must also agree to the same terms and conditions and be aware of the risks associated with the contract. Lastly, both parties must sign the contract in order to show that they understand and accept the terms and conditions. In short, a valid contract in Maryland requires all parties to possess the legal capacity to enter into a contract, provide a valid consideration, agree to the same terms and conditions, understand the risks, and sign the contract. Failure to meet any of these requirements may result in the contract being invalid.

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