Topic 7 - Warranties And conditions Flashcards
Pym v Campbell
Principles
Parol or oral evidence is admissible to show that there was no binding agreement between the parties and that the purported agreement was subject to the fulfilment of a condition. And without the fulfilment of that condition, there is no binding agreement.
Case Summary
An agreement by the defendant to buy the plaintiff’s invention was made subject to the approval of a third party, an engineer.
Held:
There was no binding agreement until that approval was obtained.
Poussard v Spiers & Pond, (1876) 1 QBD 410
Principles
Where a breach of a condition goes to the very root of the contract, the aggrieved party is entitled to repudiate the agreement.
Case Summary
Poussard entered a contract to perform as an opera singer for three months. She became ill five days before the opening night and was not able to perform the first four nights. Spiers then replaced her with another opera singer.
Held:
Madame Poussard was in breach of condition and Spiers were entitled to end the contract
Bettini v Gye, (1876) QBD 18
Principle
A breach of warranty does not give a party the right to repudiate a contract.
Case Summary
Bettini agreed by contract to perform as an opera singer for a three month period after he must have rehearsed. He became ill and missed 6 days of rehearsals. The employer sacked him and replaced him with another opera singer.
Held:
Bettini was in breach of warranty and therefore the employer was not entitled to repudiate contract. Missing the rehearsals did not go to the root of the contract
JIA Enterprise (electrical) ltd v British commonwealth insurance
Failure to provide for fire extinguisher within the insured premise as provided for in the insurance policy was held to be a breach of warranty
Akpata v African Alliance Insurance
Akpata u African Alliance Ins. Co., it was the non-disclosure of the fact that the insured had another insurance with another insurer that led to the avoidance of the policy. The proposal form contained a basis of contract clause, which warranted every statement and rendered the contract null and void in the event of any of the statements turning out to be untrue. Akpata’s case demonstrated eloquently the effect of a warranty in an insurance contract. It is amazing that a case which drew an impressive array of medical experts on the knowledge possessed by the deceased insured concerning his health at the material time, which was resolved in his favour, should be lost on the basis of breach of a warranty.
Dawsons v Bonnin
The question was whether the company was absolved from liability under a fire insurance policy on account of an incorrect answer by the insured.
The misrepresentation was made inadvertently. Besides, the information was one that lessened the risk. Yet, the policy was avoided because there was a basis of contract clause in the proposal form which was incorporated into the policy.
Provincial Insurance Co Ltd v Morgan,29
The proposer stated in the proposal form that the purpose for which the insured lorry was to be used was to carry coal. The proposal form was made the basis of the contract. The House of Lords held that it was not the intention of either party that the lorry should never be used for any purpose other than the carriage of coal so that the warranty was not broken by the occasional carriage of timber. Lord Wright stated:
A policy ought to be so framed, that he who runs can read. It ought to be framed with such deliberate care, that no form of expression by which, on the one hand, the party assured can be caught, or by which, on the other, the company can be cheated, shall be found upon the face of it.30
Welch v Royal Exchange
The court considered whether a clause in an insurance contract regarding the provision of information was a condition precedent to a claim. The insured argued they could provide the information after the claim was made. The court held that if a clause doesn’t specify a time limit for compliance, the insured must comply within a reasonable time and, importantly, before legal proceedings are initiated. While one judge (Slesser LJ) avoided definitively ruling on whether the clause was a condition precedent, he emphasized the insured’s failure to provide the necessary information before the claim was made, thus precluding recovery. Another judge (MacKinnon LJ) explicitly stated that the requirement to provide information was a condition precedent to recovery, regardless of the specific wording of the clause. Therefore, although the judges differed slightly in their reasoning, the ultimate outcome was that the insured’s failure to provide the required information before making the claim barred them from recovery.
Onuh v United Nigeria Insurance Co. Ltd.
the policy contained several conditions including notice of any relocation of property which needed prior approval of the [insurers other conditions were provision of documentary evidence by way of accurate books of accounts, stock-sheets, etc., notice in writing to be given immediately, and delivery of particulars of claim within fourteen days of the event giving rise to the claim. The claim was repudiated on grounds of, inter alia, breach of at least one of these conditions.
Oshifisan v Leadeay Assurance
Condition precedent must be strictly complied with before liability can arise.
Re Bradley & Essex & Suffolf Accident. Indemnity Society
the court held that a stipulation in an employer’s liability policy that the insured should keep a proper wages book was not a condition precedent although described as such, but a collateral promise relating to the adjustment of premiums. Besides, the condition in question was part of a larger provision which was ambiguous. Cozens-Hardy M.R. said it was unreasonable to allow the insurers to escape from the consequences of their lack of clarity merely because the insured omitted to record in a proper wages book the name of every employee and the amount of his wages.?
Northern Ass v Wuraola
The insured signed a proposal form for the insurance of his motor vehicle. By the signature, he agreed to accept a policy subject to the terms, provisions and conditions of the company’s standard policy. He received a cover note by which the risk was held covered “on the terms of the company’s usual form of policy.
Subsequently, he received a certificate of insurance. No policy was delivered to him. The insured vehicle was involved in an accident while being driven by a driver. A term of the policy required the insured to give the “insurers notice of any impending prosecution in respect of any occurrence which might lead to a claim. The driver of the vehicle was prosecuted and convicted, but no notice was given to the insurers because the insured was unaware of such a term. The insurers repudiated liability for breach of the notice condition. The insured instituted an action against them. The trial judge gave judgment in favour of the insured but the Supreme Court reversed that decision on the ground that the pertinent question was whether the plaintiff was bound by the terms and conditions of the policy and not whether or not he had a copy of that policy.
Yorkshire v Haway
The defendant completed a proposal form for a comprehensive insurance of a number of vehicles with the plaintiffs. He was given a cover note in respect of the vehicles and later also a certificate of insurance. Neither the cover note nor the certificate contained any conditions or terms. One of the insured vehicles was involved in an accident leading to injury to a third party. The plaintiffs settled the claim and then sued the defendant for an indemnity on the ground that he failed to notify them immediately according to a condition of the policy. Adefarasin J. (as he then was) held, at first instance, that the defendant was not liable to refund the money paid by the plaintiffs because he could not have known of the alleged condition until the contents of the policy were known to him. Again, just as in Wuraola’s case, the Supreme Court reversed that decision on the ground, inter alia, that the cover note was issued in terms of the insurers’ usual form of policy.
Mattar v. Norwich Union Fire Insurance Society Ltd. & Anor. (1965)
concerned an insurance claim for theft. Mattar had an insurance policy covering goods in his shop, with a warranty requiring him to keep specific records, including a stock book or stock sheets, showing a true and accurate record of all business transactions and stock. After two thefts, Mattar claimed compensation. The insurance company denied the claim, arguing that Mattar had failed to comply with the warranty’s record-keeping requirements.
The court found that Mattar only kept daily sales books, invoices, and receipts, but not the required stock book or stock sheets. Mattar argued that these records were sufficient to determine the stock levels and that he had substantially complied with the policy. The court rejected this argument, stating that a stock book is specifically meant to show the aggregate of goods a trader has. Since Mattar didn’t keep one, he breached the policy’s warranty.
The court emphasized that the warranty’s terms were a condition precedent to Mattar’s right to recover under the policy. Because he failed to keep the required records, he did not fulfill this condition precedent. The court upheld the dismissal of Mattar’s claim, regardless of whether his other records might have provided some information about his stock. The strict terms of the warranty had to be met.
