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25 Cards in this Set

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What is a warranty

A promise made by the insurer that must be complied with and if breached insurance coverage ceases to exist

S. 33 (2) MIA

a warranty may be expressly stated


"It is warranted that.."

S. 33 (3) MIA

It's a condition that must be exactly complied with whether it's material or not, if not liability is discharged

Hahn v Hartley

A warranty is at the root of the contract, and must be strictly and preachily complied with

The Good Luck

Liability will be automatically and immediately discharged from the date of breach but some obligations my survive (payment of premiums)

Basis of the contract

Converts all statement on a proposal form into warranties even though the insurer is unaware of the harsh consequence

Dawson v Bonnin

If the incorrect answer is immaterial the basis of the contract is sufficient to render the contents of the proposal form into fundamental terms of the contract

4 Approaches

The court uses rules in order to get around the harshness of this onerous term


1. Past or present, not the future


2. Contra Proferendum


3. Confine breach to sections of the policy


4. Not a warranty but a Suspensive Condition

1. Past or Present

-Wont apply to the future


-About timing and is not continuous


-If breach occurs in future-there will be no breach and warranty is still covered

Woofall & Rimmer v Moyle

If the language and intention had been for the future it would be clear and expressly stated


"what IS vs what ARE" (PRESENT VS FUTURE)

kler v Knitwear

A warranty is a draconian term (Birds) and if the underwriters wanted protection they must stipulate it clearly and in clear terms

Hales v Reliance

Continuing obligation usually is in the future and use timing in the proposal form

Hussain v Brown

Must have clear reference to the future, if it doesn't demonstrate the future there has been no breach


-Take the wording as it, and can't be ambiguous

2. Contra Proferendum

Construction of there terms and what do the words actually intend



Provincial Insurance v Morgan

Adapted in this case


-coal but carried wood-not exclusive

Pratt v Aigion


(skipper at all times-reasonably)

Terms must be reasonable / state exact intention


-How far to go without diminishing privity of contract

3. Confine breach to its section of the policy

If the statement only relates to that section, the insurer will only be relived from liability for that section

Prinkpak v AGF

Treat each policy separately


--> May not apply to basis of the contract as this case was for express warranties, so not sure how it would be applied to others

John Birds

Contracts can consist of spearer contracts, so other section will be upheld (look at dates closely) or be treated as one seamless contract



4. Not a warranty but..Suspensive Condition

During breach risk is suspended and coverage ceases to exist but when remedied the risk reattaches and coverage resumes

Kler v Lombard

Adopted in this case, cover is a SP

Farr v Motors

Taxi-ceases will breach than starts again, don't need casual link

Maurier v Bastion Insurance

SP can exist despite it saying "It is warranted"

Cash+Carry v General Accident

Risk reattaches and said warranty but held a suspensive condition

FOS

Are they eligible


1. Micro enterprise: 10 or less employees


2. 2 million euros turnover