Jurisdiction(s):
United Kingdom

Related legal acts

Key definition

Contract definition

What does Contract mean? In legal practice, a contract is the enforceable agreement by which parties set out promises and allocate risk, whether made orally, in writing or by conduct. The law of contract is principally case-law driven across England & Wales, Scotland, Northern Ireland and Ireland, with statutory interventions on formalities, construction and consumer protection. In England & Wales, Northern Ireland and Ireland, formation generally requires offer, acceptance, consideration and an intention to create legal relations. In Scotland, consideration is not required; a contract is formed by agreement (consensus in idem) with the necessary intention, with writing only needed in defined cases. Key features...

Identifying contracts of insurance: legal tests, FCA PERG perimeter guidance, distinctions from guarantees, warranties and discretionary schemes, mixed-purpose contracts, insurable interest, and consequences of carrying on unauthorised insurance business

Published by a LexisNexis Insurance & Reinsurance expert

Practice notes

This Practice Note outlines the legal and regulatory landscape for assessing whether an arrangement amounts to a contract of insurance, and the potential ramifications of undertaking activities connected to such contracts without the requisite regulatory permissions. For more detail, refer to Practice Note: Identifying contracts of insurance in English law—an introduction, and the decision tree in Identifying a contract of insurance—flowchart.

The legislative and regulatory background

There is no precise or exhaustive statutory definition of a ‘contract of insurance’ in English insurance law. Under the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 (RAO), SI 2001/544, a ‘contract of insurance’ means ‘any contract of insurance which is a contract of long-term insurance or a contract of general insurance’. Determining whether an agreement is a contract of insurance is significant because such contracts are likely to fall within the meaning of a ‘specified investment’ under the RAO, and, under section 19 of the Financial Services and Markets Act 2000 (FSMA 2000), a person must not, by way of business, carry on a regulated activity relating to a specified investment unless they are authorised or exempt. This is known as the...

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Web page updated on 21/05/2026

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