Which characteristic of an insurance contract indicates that unequal values are exchanged?

Aleatory contracts are a specific type of agreement in which the performance and benefits depend on an uncertain event, resulting in unequal exchanges of value. In the context of insurance, premiums paid by the insured may be relatively small compared to the potentially significant payout from the insurer if a covered event occurs. This aspect captures the essence of aleatory contracts, highlighting that the parties do not exchange equivalent values—one party may pay much less than what they could potentially receive in a claim.

In contrast, warranties and representations are terms that pertain to the accuracy and assurance of information about the risk being insured, rather than the values exchanged in the contract. Warranties create a specific obligation, while representations involve statements made by the applicant that may induce the insurer to accept the risk. Unilateral contracts, while informative, refer to situations where only one party makes a promise binding to them, such as the insurance company’s obligation to pay claims, but do not specifically refer to the unequal value exchange inherent in the insurance relationship. Thus, the characteristic that clearly points to the unequal values exchanged in an insurance contract is that it is aleatory.