When There Is Ambiguity in the Meaning of a Limitation

question 156

True/False

When there is ambiguity in the meaning of a limitation clause in an insurance contract, the courts defer to the party who drafted the contract.

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Definitions:

Productive Capacity

Refers to the maximum output a system, economy, or machine can produce over a period of time under normal conditions.

Supply of Land

The total availability of land resources that can be used for various purposes, often considered perfectly inelastic.

Perfectly Inelastic

A situation where the quantity demanded or supplied of a good does not change in response to a change in price.

Relatively Elastic

Describes a situation where the demand for a product is sensitive to changes in price, meaning a small price change can lead to a large change in quantity demanded.