Chapter 7 - Contract and key terms LO6

Question 1

Statutory rules

Answer 1

Rules laid down by legislation -

Question 2

Common law rules

Answer 2

Developed by courts

Question 3

What is excluded from UCTA 1977

Answer 3

Insurance policies

Question 4

Ordinary meaning

Answer 4

The literal meaning

Question 5

What act requires contracts to have plain intelligible language

Answer 5

Consumer rights act 2015

Question 6

Noscitur a sociis

Answer 6

Often used when terms are used in a list, allowing words to draw meaning from common elements

Question 7

Ejusdem rule

Answer 7

Construction based context - things of the same kind

Question 8

Ambiguity - contra proferentem rule

Answer 8

words which carry 2+ meanings which construed against the party who proposed it, other party given BOD
LAST RESORT

Question 9

Continuing warranties

Answer 9

Things that the insured will keep doing throughout the policy period

Question 10

Express warranties

Answer 10

stated in the policy - warranty or warranted used

Question 11

Implied warranty

Answer 11

ONLY in marine insurance

Question 12

Conditions precedent to contract

Answer 12

Policy will not come into effect unless x is done

Question 13

Conditions precedent to liability

Answer 13

Allows insurer to discharge themselves from loss if a term is broken

Question 14

Collateral conditions (minor terms)

Answer 14

Breach will still entitle insurer to pay claim, but can claim damages

Question 15

Exception clauses / exclusions

Answer 15

Exclusions such as Russia etc

Question 16

Suspensive clauses / clause describing the risk

Answer 16

When breached cover is stopped until remdied

Question 17

Breach of warranty

Answer 17

• MIA 1906 cover terminated automatically
• IA 2015 = discharge of insurers liability before breach is remedied
• No need to prove connection between breach and loss unless warranty intended to reduce risk

Question 18

Breach of condition precedent to contrcat

Answer 18

Contract never came into existence

Question 19

Breach of condition precedent to liability

Answer 19

Insurer automatically discharged from liability, policy remains in force

Question 20

Breach of collateral condition

Answer 20

Claim for damages

Question 21

Breach of suspensive condtion

Answer 21

Sam as warranty

Question 22

Promissory estoppel

Answer 22

insured who has broken warranty cannot enforce contract unless they can prove the insurer said the won’t use breach of warranty in defence

Question 23

Actions that may support waiver of estoppel

Answer 23

• issued or renewed the policy
• Advised insured about future loss prevention

Question 24

IA 2015: Terms not relevant to actual loss

Answer 24

• Loss of a particular kind
• Loss at particular location
• Loss at particular time

Question 25

ICOBS rules

Answer 25

Rejection for consumer claim is unreasonable unless:
- Fraud
- Breach of warranty or condition

Question 26

Contracting out (IA 2015)

Answer 26

Parties are prohibited from contracting out if it outs consumer in worse position

Can be done in business insurance if there is transparency

Question 27

RTA 1988

Answer 27

Insurer cannot reject 3rd party claim of victim by relying on conditions or warranty

Question 28

Employers liability insurance prohibited from rejected claims if:

Answer 28

• grounds of late notification
• Insured failed to comply with condition which requires him to take reasonable care to protect its employees
• deductibles are prohibited

Question 29

Joint policy

Answer 29

Interest of assured is the same (husband and wife insure their property) - breach by one will affect the whole policy

Question 30

Composite policy

Answer 30

interest of insured persons are different e.g mortgagor and mortgagee, construction
Breach by one will only invalidate their own policy

Question 31

What is the position is the word storm and fire in?

Answer 31

Meaning established under doctrine of previous court decisions