IES AND CONDITIONS mer is concerned with the cerms of the contract of insurance other hat describe the tsk covered and exceptions to it. The nacure of was described in a general way in Chapcer 6, The contract of se yl invariably in practice coasist of not just the policy document Mako the completed proposal form where relevant, and often, in ether docaments including in some cases renewal notices, This Minay cones thee sos of relevant cers, namely warranties, condi- G dlauses desctiptive ofthe ssk.' There is, however, no necessity for Hic may be, For example, thar a particular contract contains only sin ehe sense thar they have been described earlier Myaranty is the most fundamental term and will therefore be consid pefore we distinguish and describe clauses descriptive of the risk icons. However, we must note that in consumer cases concerning, MPinsurance an insuser’s tight to rely upon a breach of warranty oF nis constrained by the Insurance Conduct of Business Sourcebook. onsidered ar che end of chis chapter, cogether with consideration of pects of law reform.? crangy must bea tern ofthe policy As will be explained further below, fesenially a promise made by the insuted. It has already been pointed that, upon breach of a warranty, che insurer is discharged from all ‘as fiom the date of the breach. This dace will vary depending on type the warranty is, 2s explained shorly. Warranties must be strictly A with, and itis quite irelevant that the breach is unconnected with ls contain exceptions to the risk, bue these, whilst ofen similar in efece ne of shese terms, operate diferently 64, also the abolition of the basis of che contract clause in consumer insurance 095. means sat be incorporated into the policy although it need noe be writen the bey of the ply self. Ie could be atcached tothe poi, or even written ie margin: Thumpuoe v Weens (1884) 9 App, Cas. 671, [t cannot, however, be fseparate document, even if his i teach roche poi, unles is incorpe- ep: Bn Sper 177 1 DoWARRANTIES AND CONDITIONS 92 The Effect of a Breach of Warranty Until relatively recently, ie was conventional, at least io respect of aon insurance contracts, co treat a warranty asa fundamental cesm ofthe breach of which entieled che insurer to repudiate the contract in ts However, this view, which had some support from case lay! ea longer be regarded as correc in view of che decision of che House of Bank of Nous Scvtia'v Hellenic Mutual War Risk Atcaiatinn (Bermuda) Good Luc." Hiete it was held that a breach of warranty in « matey automatically discharged che insuter from liability, in accordance liceral meaning of the words ins.33(3) of che Marine Insurance Aer ® Alchough “tue” waaay which, lke an excepcon, concen Sa be matral to that rok, a -concactul” waren, Wek ff the lnm, doce anc ocd a be ast (1786) 1 TR 343, Selo the eater a of Bute » Waten (79) 26 Both cece wore decided by Lord Mansel cain aed exabligl tio beewecn werreties ae eepreeaatons "The ina fr this leis ancien aod esablsed when feed camoune—it was armed cata che partis bad agreed el ch wer cated to act pefocmace, segue of dlubr cue 250 exc age bur whether i an apply nom; pa inguin corse st the ery ast open tee Sere, the Law Commissions tesmen of warts ints Roe Lav: Non Diclosur and Breach of Waramy, 1980 Cand. 8064 wl i cppeodel to tee Repo, which wc the ngage of pace Tee wo the way in which breach of cordion viewed in gene a © Se che case ced at 28, blo nthe Cor of Appeal in Ti Gl TQ. 8 Gee below), che judges cook che damenally Opn taken subeequently by che Howse f Loc and were concer 0B oncscts i line wh contacts in general. On fas hough JBL 248) this seemed sensible, but on refection the reasoning Tovds perhaps more convincing. Se further blow % [1991] 2 WLR. 1279 Foreommenes, see itd (1991) 107 LQ W990) $985 Cake SDT LMCL QD.” "Ifa waerang] be not fect] compli with che, subjee oan sion in the policy the insurer is dacharged rom Lib emi THE EBTECT OF A BREACH OF WARRANTY 165 The benef of the larrence Fed he who Ind ben nated of the aalgnnens aking. wri che back promply “ifthe sig Bibesihcndng chs, the ours fed to ur he ee oes he dacoverd ce enchof ascend eet fro « prohibiced ffeas held, it would noe have dane had the insurers camplied with Beraking 0 advise it promptly. Restoring the judgment at fies Band reversing the Court of Appeal the Fiouse of Lords upheld the fim for damages on che basis that the club had acted in breach of Braking. The insurance aucomnacically ceased, pursuant to 5.33(3) of Ace, when the warranty was broken, KGoure of Appeal the issue had been approached from a general aw perspective” by regarding che wartanty as equivalent vos condi- ntact aw generally, wich che provision ofthe 1906 Ace relegated iy consideration. Lorel Goff of Chievely, giving the only reasoned Bp the Hose of Lords, was totally dismissive of this approach ro I colifying stacure whose language was, in his opinion, cleat, la fhe Ooureof Appeal had confused che ditinction becween conditions al terms of a contract and conditions precedent Bs 30) of he 1906 Ac refecs wha has etn described io sce Bis of Gre The Marne Insane Ac 905, wt veer Hee insane owing the enn "wrany ns anting vcnehnna On: his appear bcos ally endear Benson warincy n-ne complet wth, whe law oan Bey cen te dare ofthe beech of means ee an Bins of che warany i «conion precedent othe hii Eta of sce Tit moreover rhe ft thn Pisin iran sca he ine oly aepste sak every Gl, This erelyundemancale val toh Betncin c ofbreach os promisnry warany wooo, Betas ur withour prejudice co any libiltyincured by him before caine in he res he ei 7 Reesisicacten power mal inuraace cu aera at tembee The rbd ts warn Rona Cahn i iad bn aan, once, bse = ‘the duey of utmost good faich, Hee mec usc lw soc nding reports of BE) iaw Commision ahve et Hae Pals,ARRANTIES AND CONDITIONS the insurer from labilcy as fom che date of the breach. Ing conditions preceden, che word ‘condition’ is being used in is cami Eglih lay, under which the coming into existence of Ur tag dbligation, or ehe ducy or fureler duty to perform an obligation, @ upon the flilmenc ofthe specified condition. Here, where wean event the contacto coming ar existence. Wa oe Ga gm takes phic so chery ee nvr from nb os 6 breach." 9 This reasoning is logical. Ir makes the warcanty more like an exception risk chan a condition in the usual contractual sense, since the © ope of an exception is in no way dependent upon a decision of che in The contsact may survive a bees of warranty in the sense of being obligations of che insured which may survive the breach ft to pay a premium), although this is likely co be a rare occurence. In the contract will come to an end.** The language of repudiation iin priate, a8 Lord Goff points out, ac least in cerms of repud avoiding the policy. "I is only in the sense of repudiating lsly it would be right to describe [the insurer} as being entitled to 1g However, the decision was aoc wholly free from difficulties,” par because a breach of warranty can be waived” Tb a large extene ae [1992] 2 WL. Rat 1294-5, Although ic could be argued tha che effect of« breach of condition in «aula of sal of goods is similar ce Bradgate and White, Ch.3 in Trminatin of Goa Bieds, Bradgate and Villers eds, (London: Wiley Chancery, 1993), Although, sighes ofthe insurer may survive, eg. rely oma com ia he fncwictanding a breach of warranty (e, for example, cares uphalding sii rte of premium clause—Ducktr » Wills (1834) 2 Comp. & MC 348 Thai 1 When (1884) 9 App, Cas, 671, Sparenbrg» Edinburgh Life Asseane Go 191 KB. 195, Kumar v Lif Inurane Corp of India (1974) 1 Toye Rep. Tia 1D.2.1}—and Shing + Liner 6 Landon & Globe Dinan Go (191712 KB upholding an arbitration elause—see 14.10.1. ? One arises out ofs.34(2) of the 1906 Act providing that where a wars AB broken, che assured cannot aval himself of the defence thatthe brea ht remedied, and the wacraney complied with, before los; this aow appear dat 53403). This is obviously essential in che sense thac chere wil be many tee tibere an insure is content to overcok a breach of wacrany, bt the con vraiver was somewhat dificult ro understand inthe face of an eucomati 5 tion of «contract. Some discussion of the isues such ae whether waner shal tread as eefering to sme sore of eeinetacement and whether ehe insure asi right eo inset on waiver or “teistatement’, in «case where che insane mii «quite content for che insurer co be dichacged from lsbilcy can be ound io BA Chin Termination of Curecs, Bird, Bradgate and Vilits eds, (1995) Bipageement 00° (0s Mpa clsce ws intended to prevent the insuce fom refusing co honour Mpa aly in che event of misrepresentation, aon disclose ot breach of sen H OF WARRANTY 167 ic has since been decided tha Bpaspending cover rather 1d not by election" Te should provide for a breach ro have the in leading toa complete discharge of x that The Guad Luck applies t0 non-marine insurance ic does to marine insurance contra E The Court of Appeal has refered co the breach of 2 non-marine GPhus, aushorites chac have assumed that, in a noa-matine context, the etal breach of warrancy isco give che insurer the right co repudiate the DDI Canty & Giver Inarance v AXA Corporate Solitons {2002} EWCA Civ HPS}, (2005) Uoyas Rep LR. 1. Sc also Arg Stns FZE «Liberty Tawranee (Pe) BBO} EWHC 301 (Comm), (2011) 2 Llopi's Rep. 61, reversed on the facts MPOUD EWC Civ 1572), whece i wat held thar che insure’ faire ca plead Prec of waraaty ac an early stage did not amount ro s representation relied 02 Bie isurcd and hence waiver of the breach, Special circus Bele before silence o inaction could amoune co an unequivocal sepeseataion. Be farer as to waiver, 14.11 Be bai Feg (1998) 2 Lloyc's Rep 652. Ia his event ehe waccaney isin effect the Baie ss. clase descriptive ofthe rk; see 98, 8 would be Bihar, 2 we shal sce shorely, warrentcs ace not just promissory oF contauiag, Mime aise a the inception ofa policy. Pieconsequence would be a move logical seocrure to insurance law, and, it may Bebop, more sensible policy wordings. Scethe comment made in 6.1 aboot the Pisired se of lnguage in insurance siuations Wain Bw (1996) 1 Lloyl’s Rep. 627 a 630. Pirro tioyas ep. 1x. 14 Mere how chi is possible if, as Lord Gof said, the insurer auomaically dis Bead on beeach of a waceancy, We must assume cha the insurer is Forced £9 Bethe breach168 WARRANTIES AND CONDITIONS policy mutt be regarded as wrong.” The mot dificult al The Good Lai a Union > Hes the decision in Wat » National Motor and Accidew be in breach of a wats the insuced was allege ray as value of property insured. The insurets purported co reject his dai relying upon a term of che policy co enforce arbitration. Te was hel dy relying on the term, the insurers had waived their right to avoid che which was ehe only righe chey had. Th inconsistent with general contractual principle, but in fac, fellow 5 ng Good Lac, ic mast be wrong as inconsistent with insurance prngpes 's breach simply discharged the insurers from Liability, but dal necessarily affect the contract ss a whole, che reliance onan arbitration gg by itself could noe have been a waiver» by decision hes been etiail 93 Warranties as Promises Warranties are exenilly promises made by iasureds celal or eo things har dey undzrake code or vot to do, «2 all ‘They wil ovaahly fee the esk to which the Ins is aja cient 0: ae cr he dee they ave made; weoantes a to he ree ala ace three sorts of warranties: warranties a8 t0 pe * Someries it bs been sil shar she nse sche sight © em Contact rendered vdbl Stl thus of hangings od pag been tceved for nun-dclnue and misepreteescn, one Cham tire conte cn be soled by reson of pence pines ae alll Trallt of hr provio of te cmc "The emma (a we Tnmrace waren ays wl be sera belo, teen at i teow of conplced prepa fc aed ae thos very sao Therese unequivocal juicalsaterpents (chien, bute heal Godard C}.in Was» Neil Nutr wu Cnn a Loy’ Rep, 461 tp. A63 and of Dold J in De Marr Gd ad a Inara Co id 1967) 2 Lay's Rep. 950 4538. The cee ae ttt inthe reports ofthe Law Refnm Comte ond che a Con fete win fais above The Gost Lach spo 900i f ugh co ear lagly cdundane ouside pope foc waronaeadal 2 eve aed (1995) All E80, 51 Ths holding canbe ceed in any event, Unless the waranty of a ie irs mae, Snes when the peopl form 9 cose trem wih pec fone been nw prouad ft aloving the ae Oa “The warany does no: scm to ave een continuing marcy ee aaa Cranes on peopl fom eno implied indtntly soo ten Saves Winn Lm ape Peon eso Co (1969; 2 QD. SOTA Sethe Law Conimisions Report No104 9, abo), 66 aad 623 3 Ser dn cheese rd 0 nf, bore Inna opp.t Warr00 Biibeccmioe’ shortly. leis Boo = = Be 3) Bisisinpit in eas « BURGH Ke. a7 WARRANTIES ties of past or present fact es 25 co past OF P fora completed proposal for ably sand answers chereon, if chey are warranced, will be presumed co be facts will usually, bue not necessatily arise as The act legal mechsism for this tosay chat che starements and 2 Continuing warranties ot promissory: They are 5 by che insured chat facts will ot will not exis the fanty to maintain pr ty in a reasonable condition, arge the insurer from liability ab initio, si at the commencemeat of the contract, breach warranty discharges che insurer from liability fom the date Wiech, bur ic is valid up to hac dace, The insurer would chus, for Harp, be liable for « seas Bley Wherher a warranty is continuing of simply present depends prima- Fajen the lanza Beer be cons Bore In Wisi Bipleed 2 proposal form for employers’ liability insurance that ies Bebine, plane anc ways “are Win good order an Biting the argumene of che insurers that the warranty was continuing. The Beet the present tense rather chan the frure tense was decisive. Lord WGrene MR said” loss which occurred before che breach. Continuing from completed proposal forms of from the body of the There appears to be no bar co its being bord, but in wing, it must concain in its wording a clea reference to the & Rimmer v Moye, the insured warranted when it properly fenced and guarded, and other condition”. The Court of Appeal had no diffculey in Pie woderwrites incensed ro reer tothe futue, ies most unforcunate that, Aprined document of Had they Headed chs: , nothing would have been easiee than eo say so, If they cd Bae mean ic, Lam aca loss to understand how the point comes tobe taken should not be so expres ine Insurance Act 1906, tom Lido Bonnin (19 A.C. 413, at to which see belowWARRANTIES AND CONDITIONS WARRANTIES AS PROMISES fore, the question addressed co him and his answer could only Similaly, in Kennedy » Swish a warranty in a proposal formyl etering coche farure.* insurance which read: “Lam a coral abstainer ftom slcoholic drinks hheld eo relate simply to the past and che time it was made. Iq Prudential A srance Co Lid ‘occupied, worded cleatly in the pre 2” a warranty in a fice policy thatthe pg Warranties of opinion tense, was held otto haya 7 of opinion are less severe than warranties of fa cause the Bs ecicsur tx ealterurmanberetinirer Bee tne wl be breach of wutany only fhe scary Beis en incores snow Toe und at exec se a cesuin only eumacis of opon sa en ott" wing effec. More recently, in Husain © Brown, the principle of Woolfall & Rimmer v Moyle in 2 case where a wang resent tense. Doubs wa ‘on the earlier decision in Hales » Reliance Fire and Accidet Inn 1¢ Court of Appeal intrader alarms was dleatly worded in ¢ svhere a present ense warranty regacding the natuee of goods pein posed pi in fie and ocher polices on property, warrances 4s tO the manus premises and precaocions taken agains: loss will prima facie be ral the faeute, on the ground char otherwise they would be of lice oe ; Creation of Warranties was read a8 a continuing warranty by reference to as to the insures Bie number of ways in which warrenties may be created. Some of Be found in the body of the policy whereas one in particular is proposal forms, namely che “basis of the contract clause", We shall this device separately olicy may create warranties by che use of che word “warranty” itself fp the phrase “the insured warrants ...", but even this may not be ifthe coure concludes that as a matter of construction ehe parties ave intended a warranty A provision whereby the contract is oe void or voidable in cervain circumstances probably has che #° A classic illustration here isthe seandard increase of risk clause no special principle oF insurance la Tn my judgment 5 th answers in ropost! forms ro be res, prima faci or otherwise 8 promises eo the farure. Whether or aot they do depends on edi onstuction, eamely consideration of che words the pastes hav il Tight ofthe conteet in which chy have used them and (where the Wal of more than one meaning) selection of chat meaning which seems al to corespond with the presumed ineencions ofthe partes ‘There was another exception to the requirement of furuity in the used that mighe survive che decision in Hitain o Brown. This sete provision can only be read as so che future, it will be conti Beauchamp v National Mttual Indennity Insurance Co,® the plait a lemolition of a mill. He had never Bien chet cis simple ask for an insurer to deat sucha clause in the ec the cour may, and arguably should, isis ” hae ic doce, “i of Mamauue » RAC Py Lid (1976) VR. 617. See also Maple v Rey Insurance Co 1979 SLT cffeceed a policy co cover the done demolition work. He warranced chat he did not use expli basiness in words that were eleaey in ehe presen cense. This Was ERE ‘ime ic was made, but che insured did laer use explosives and ei breach of watraney. In ehe circumstances, because he had BBs fowires by the Scacemene of General Insurance Practice and, although sen sno longer applicable, there is lle doube thatthe pce ea Micse are aso cxamples ofthis in commercial polices, De Mawr (eel) Led » Bectin nsarame Ce [1967] 2 Uoyd's Re Gath and Cary Lid v General Accident Fire & Life Assunone Bboy’ Rep. 229, discussed helow. BE wid” or “yidable™ is mislead is misleading becasse, as we have sen eae, ¢ Bearecycicharges the insures from Lablty and doesnot rent the Peidoravcable, Despite his, iis thoughe chat iis til proper to regard Baca Wind 6 Sau Ld ation i) Lad (208) ed cg 2051 EWA C098 201) Had ep 1976 S1.T. 110, See also Suweng’ v Kenedy (1950) Ic. 855 Keil [1974] 1 Lloyd's Rep. 54% » [1983] 2 lay’ Rep. 667. 4 According to Wook J. (above at 672-673), any other consacaa been unreasonable “« " [1996] I Lloyd's Rep. 627; se Hird, (1996) BA. 62 See alo Bids, "Wartaties in insurance proposal forms” (19601 2 Lloa’s Rep. 391 {1936} 1 Lloyl’s Rep. ot 6 [1937] 3 AUER. 19. 9771 FB ion so ods policy contained such wording and porting the construction of tems beginning “itis waeranced per Swille LJ. ascWARRANTIES AND CONDITIONS in fice policies thae was discussed in Chapter 7. In addition, ie musth to the court to conclude chat on che coastruction of the policy, the ofa particular tise vo a warranty” 9.4.1 Warranty or condition precedent? The use of the phrase “condition precedent” can give rise to dificult has been seen. there is « legal distinction becween warranties and) tions precedent co a particular liability, but in fact, whs ts a warranty may in an insurence policy be referred to as a condition fedene, provided! it imposes a promise relacing to che risk and itis lee performance ofthe condition is precedent co the liabilicy of the insurer the policy.» Ie seems clea that a general declaration making the terms policy conditions precedent eo the validity of the policy is not sufien ‘create warranties of fandamental terms of all ofthese cerms, becuase by ‘nature some of them will be of the sore chat cannot conceivably be re as precedent to the liability of the insurer, for example terms whieh indemnity confer rights on che insurer such as subrogation rights) consider che nature of conditions aad condicions precedene furcher below Insurers, chough, cannot be blamed entirely for this confusion by of che wordings they adopt. Some of che decided cases are equally Judges have sometimes used the description “condition” when refecing ‘what here is meant by “wartenty”, Even terms chat are very similar 104 ther have attracted different appcllations and differt in decided cases. Two contrasting examples will suffice. In Conn » Wa ‘Motor Insurance Assecation,® a term i. a motor policy requiring the as to maintain his vehicle in an efficient condition appears co have ded as a warranty in the proper sense. While the Court of Appell talkin cerms of its being a condition precedent, they appear co have regal the eee as precedent eo the validity of che policy because ehey hel ‘upon any breach the insurets would be discharged from liability In WZ 2 Spratt, on che ocher hand, aterm ina goods in cransi policy equi insured to take all reasonable precautions for the protection and safegual of che goods was regarded as a cerm, breach of which could be relied i only if there was a causal connection between the breach and a pana 51 See 7.16 % Law Com. No. 104, 63. a) 4 See che extract from the judgment of Loed Gaff in The Gond Lack (1991) 208 1279 cited at 9.2. 55 [1966] 1 Lloyd's Rep. 407. See farther at 21.5.6. {1970} 2 QB. 480. REATION OF WARRANTIES caso tnt viv, cht thi a hit may I iceadercsdenmarddardrinces exact SI ic ocean nny pines partir li, hare The Basis of the Contract Clause deeally, pethaps the most common and easiest way of creating, warran- He non-marine policies was the basis ofthe contract clause contained at [pot of the proposal form. While this device became less wide-ranging in Sefecs than earlier, because of the impact of the former Statement of Insurance Practice, i is sil of importance in commercial insurances hs appeared to be used in consumer insurances to create warranties of 1 Now, by virtue of s.6 of the Consumer Insurance (Disclosure and rations) Act 2012, a basis clause cannot convert pre-contractual tations into warranties in consumer insurance contracts. Th don here cherefore relates only co business insurance contracts, even gh some ofthe cases ciced concern individual consumers. making che questions and answers and declarations on a proposal form ass of ehe contract, and providing chat in the evene of any uneruth the r-eould be voidable, insurers succeeded in equipping themselves with cetil defence to an action on the policy much wider chan hae arising iets of the dt of disclosure.* The device was first adopted in proposal nice Roki refered to the term asa waranty, hut tie clear cha he was using $e texns cocition and warrancy inthe opposite sense ro what isthe usual prac Be and the practice adoped here. Se alzo Pit Row» Phenix Anarene Pl: (1986) IBONLJ. 33 (see 13.2.2}, where a "condvion” requiring the eaking of reasonable Bia was held noc co be actionable unless che breach caused the loss Wsse, 64,99. [e would also have been importane f the recommendations of the Las Commission, refered to a 9.13 had been implemented, bue aay futur “xm wl suzely ensure tht all elevane terms are covered, whatever theit ead Qe gal nature Mires ander the former Seatement, ie was sil accepeable to use a bass clause ro “rate promissory warranties Ptssapolies wis cir from Apail 6, 2013; see 7.1. Hira persusiv aceackon the device, see Hasson, “The basis of the contract cause Hinsranc law" (1971) 34 MLR. 29. Hasson points ou cha the warranties held fob cca by basis clauses inthe early eases were material to thers and these 285 could rheriore have boen distinguished in later cases where the warranties exe noc macerial, of which Dewion Ld v Bain, below, i classic example, This Bverer, would have been most unlikely a atime when the prevailing doctrine Bas feeder of contraceWARRANTIES AND CONDITIONS forms for life insurance in che last century. fn Thomson v Wem ton proposal form asked: “(a) Are you temperate in your habit and vou always been strictly 02" The proposer answered “a)cemperac ‘The form contained a basis clause which expressly said thar in dh an untruth, the policy would be void. As the proposer was in fie drinker, the House of Lords had no d n upholding the insu “ation of labiliey, Materiality,eey said, was irrelevant, even thoagl the marcer mast have been material on che facts of che ease) Tn contrast, in Dawsons Ltd v Bonnin ic was accepted thar thei answer was immaterial. A motor proposal conceming a lorry asked veas garaged. The propoter wrongly answered chat it was gang edress in central Glasgow, whereas, in fact, it was garaged at anad the outskirts of the city. The proposal form merely declared that Consitute the bass of che contract; there was no reference to the oid or voidable in che event of an untrue answer, something issenting judgments was regarded 3s of great significances Des by a bare majority atleast one of whose members was aot hapa rule, che House of Lords held chat the insure could repudiate all Basi” was sufficient to render the contents ofthe propose! form in mental veems of the contract. Wich respect, “basis of the contact ‘oul simply have been interpreted as the starting point on whi tions were to be based, so chat incorrect answers on che proposal fied repudiation only if they amounced to material sisi However, whatever criticisms may be made, che decsion fas oni authority for the simple proposition char a basis of the copay converte all statements on & proposal form into warranties. Inti «2 (1884)9 App. Cas 671. Eavie cases are Ducks v Wali (1838) 21 nd Andon Fiegerld (1853) ELC. 483. 4 eee vet che querion really asking for che propose’ opinion tig parce of fae? See Hasson, above, at 34-5. Ici fica cai wefan most ofthe cases that questions asked of che heals oF TRegrance can be answered factally by 8 non-expert: se he ene veevleches Moulton 1). in Joel» Law Union and Crum iasrane GM $63 ce B65, cited in Hason, above, ac 34-39. See alo the slated trea of non-disclosure, discussed at 7.6.1 [19001 2 AC. 413, The other leading case is Yorkshire anaes Gl (1917) AC 218 4 See Viscount Finlay at 430-431, and Lord Weenbury at 486437 © Lord Dunedin a 434435. this point is sucogthened by the fact that che polly eons ‘apres providing tha material misepresencaion or aon-dial deri eid; see Hasson, above, # p36. «See, eg the later derision ofthe House of Lords i P [19531 A.C. 240, discussed below. sinc sare BEWHc 1 THE CONTRACT CLAUSE us Japon Insurance Co (UK) Led, chece was the re chat to the best of my/our knowledg Bp ccemenss and! paciculas concined in che proposal are crue and dnd thac 00 material face has been withheld or suppressed”. The pied chac such + phrase qualified the clause, which would other- een « warranty, condcring it at best a representation that the Geelacing co macerial facts were true and and thae no fact had been withheld or suppressed, There was a seandard basis Merb propol form. Ie was eld chat che effect ofthe basis clause was, ion into a warranty once the insurance commenced rerial facts was to be read quite distinctly.” Phe concact which cequires ths, i is also irelevane chat ehe proposer re the questions in good faich and co the best of his knowledge iin face, answers ace inaccurate. An even harsher example of this Mkcsion in McKay v London General Inavance Ca.” The proposer for Mrsurence seated on che proposal form chat he had never been ofa motoring offence. In fact he had been fined 10 shillings maay Ipecriously for diving without efficient brakes because a nut had Jase on his motorcycle. Even chough this was held nat to he a mate- Bbethe purposes of the duty of disclosure, che insurers Hit ibility for breach of warrancy™® cntitled to say, cis scrice legal posicion las arcracced considerable crit ics noteworthy chat judges have been as critical as other commen- Abe possibility of ceform in business insurances is considered in 9.13, Interpretation of Warranties gation ofthe sciceness of the law of and in pa ‘warranties, and in particular fics of a basis clause, has fected by the courts adopting ofinterprecation.” In particular, as ie is usually che insurer who Mops Rep LR. so: 1986) 81. 404, Fora sccee example ace Gee Howse Asean L indicate Managemens Led {2012} EWHC 310: recy kn id 51 Uoys's Rep. 201 ENS Bk oe he Bg crkcis ce ste why the Law Cu 0 ecco mminion, Report No. 104, a e ts che Law Comisions” Conlon Papee LCCP 182 BBA June 2007. events che case cat insurers have nt generale Baiclepal ght, se suggested chat 2 Br a this ac is ao answer co the aces hough if the nacual ond ovdioary meaning of = warranty is clea, i wil Se foc example, GE Pranbuna Reinsurance Lad » CMM Tratt Ne 1440 ‘Admly), (2006) Lloge’s Rep. 1.8. 704:RRANTIES AND CONDITIONS WARRANTIES IN A MUCTI-SECTION POL formulates the wording, in the event of any ambiguity, dhe waray Mi no sefecence co materiality, However, in Prinpok v AGF construed contra profeentcm. The leading example i ded Jap the Cour of Appeal cas doube upon ths priniple of general House of Lords in Provincial Inzarance Co Morgen” A Gem ei 7. sured a lorry under a standard motor policy, Pace of che comple Bane ook oot « “commercial inlsive” nsurace with AGE The form, which was the basis of che contrat, read as follows: “St pie numb of secon, each offering aiferenteype of cove pucpotes in fll foc which che vehicle will be used; and (6) the Beton A, che plaids personal propercy conssing of stock and foods to be caried, (@) Delivery of coal; () coal”. One day dell was insured gst destruction or damage by, inter alin, fc. tarzying some tember, a ic did occasionally, as well five hung fevera clauses inthe policy pucportng to be warranties. One of Coal. After the cimber and three fifths ofthe coal had been del fers PY, stced chat che insured wacranted that there was @ while the lorry was being driven +o deliver ehe remaining eal Bem on che premises which had been correctly installed and whic damaged in an accident, Ie was held that che insurers could ge properly maincained and fully operational throughout the currency Tabiliey for breach of continuing warraney. The insured warraneadi Fpeumince. Condition 5 sacc the lorry would in general be used for carrying coal, which Wasi vith; he dd not, onthe wording ofthe question and ans Beran shall, rom the time cis aplicd, concinu to be in fxce during Bete crency ofthe Policy. Fire to comply wich ay Warracy hall the vehicle would be sed ¢o carry only coal. “In insurance a though it must be stricly complied with, must be striely though ‘Another example of the reasonable interpretation of warrant by the cases concerning obligations imposed on a liability insure reasonable precautions. These are considered in Chapter 20, ean csi for loss, destruction, damage or Liabiley which i wholly or fy da 00x afeced by such flare to comply. fr che plincif?’s premises caused damage to the stocle and che lleged,iocer alia, a breach of warranty P17, which, chey claimed, faly discharged chem from all liabilcy. Ie was common ground that yas indeed a wartancy that, by virtue of the facr that the alarm Dorking ax the cime of the fire, had been breached. However, Br contended chat the various warranties contained in the policy di fo whole of ic and both che judge ae first instance and the Court of Agreed, They held char section B of the policy provided caver for Trecause che P17 warranty was detailed at the end of thar section 97 Warranties in a Multi-Section Policy Le was traditionally shoughe char, provided che cetm in question ‘rue construction, « genuine warranty and was properly incotp the policy, then it applied throughout the policy, even if the concsined different rypes of cover for many different subject mi having cheit own special terms and conditions laid down i secctins.”” Breach of any wacrancy, regardless of the subject mateete of cover co which it pertains, would aucomacically discharge thei Bymeans of an endorsement, it was incorporated only into chat section gly, breach of P17 could discharge the insurer only fear lability for ures arved ac this decision by examining the concent of other Hsin the policy. They all had che prefix B, bc were ac the end ofthe I 2 and eh coments 254-256 Bly co which they were relevane. One in particular was dscused at aches from the cate i considered below. See also che commen gt. Section C provided cover in expect of money. Ac the foot of Hauais» Brown (19961 1 Llye's Rep. 627 a¢ 629-30 and che de lo, chere was a clause, P20, which stared thatthe insured warranted Aan tare SA (208) EWCA Co 131,200) ai Sh seg aoaon of money +. shall be accompanied by & wise gumaty ns mate polly on avis oe a tesponible adult persons...” Hest L. confirmed the view of Favour wth noone on bo, ews tobe read as elevane ol che vem #8 on nly one person had accompanied a consignment of moncy to the 11938) A. 240. Be frst inscance chat ic was ridiculous to suppose that if on any 07 was being navigated. Apparenly che partes regarded The eke rather than a warrancy in the scce seas, but chat made m0 the question of construction, aor indeed co che insurer's strempe ta Trdeed, most insurance, inckiding consumer household insures a ibs Rep alsel” in this wey, one secion dealing wich che cover bea PRM Hsacion was oer the sum of £2,500, The mu Caused by fie of chef, ec, aoeher with cove fr public libiiey a Biedinche Policy Schecleto be ew.(WARRANTIES AND CONDITIONS: plaincifs bank, then the insurer would be automatically discha fability under all sections of the policy, including produey ang liabiliey ‘Although novel, this seems a common sense result and js example of how the coures, particularly today, are concerned 5 warranties reasonably Hirst LJ. stated: “In my judgment, je follow from che fact thatthe policy isa single contract that ies tog ‘asa seamless contractual instrumene". Te would appear dhae a mul policy will be regarded as in effect consisting of several different in contracts. This does not seem objectionable in principle 98 Clauses or Warranties Descriptive of or Delimiting the Risk Sometimes a term in an insurance policy, which at firs sight lol ‘warranty, may be construed not as a waeranty (or as a condition) ing Tense, but as statement or clause descriprive of or delimiting the suspensive condition.” This sort of term, relating co the use of insite erty, has a similar effect to an exception to the risk propetlyso-clal insurer not on esk while the teem is not being complied with compliance does not discharge the insurer from all ability and the taches when che cerm is being complied with. There is n0 need jnsorers to prove a causal connection between the “breach” of uel and a loss, so in this respect che cerm is similar co a warranty an from an exception and a condition? Originally, chis device wil respect of appropriate statements on proposal forms with basi tse, it seems, to procect an insured from the harsher consequentey ‘would follow from the construction of the teem as a waranty 0 See ao che dictum of Saville LJ. in Husain » Brows, cited by Hit Lloyd's Rep. LR. ax 545-6, Above a 346 1 See the similar principle established in American case law, a desis The Lat of Inonance Costas eh ed, (2002) 20-6CL 1 Sometimes che description "warranty describing (or delimiting) eh i te face e.g, De Maurier owe) Lid» Bastian taurance Co 196T% 50 and GE Frandowe Reinvarance Led v CMA Tht No. 1640 (2008) ‘Admit, (2006) Heyes Rep. LR. 704), Alchough chis seems a set Sppellaton, ie is consistent with marine insurance usage, whet te werd is often wed eo describe what in effec are exceptions to Hea srarranies in the src sense © See Ch 13, 5 See eg. CIN Cath & Cary Lid v General Aside Fire and Life Ana [1989} 1 Lloy’s Rep. 259, which is discussed below. 6 Se Baer (1978) 2 Can. Bus. L}. 485, Be AUsEs OR WARRANT RIPTIVE OF OR DELIMITING 179 jody of an insurance policy have been held to have sms in che be seen below, Pec, 25 will Hemp in Farr Motor Trader’ Matnl Insarance Set.” che pif w taxiccabs. In answer to the question on the proposal form: vehicles are driven in one of more shifts per 24 hours”, he Bese one". For 2 shore period, because one of the taxis was being ihe ocher was driven in (Wo shifts in the cousse of one day. The Midene occacred much later when both cabs were on the road and Hoa being wsed in more chan one shift per day. It was held that the Sere liable in sespece of this accident, ‘The statement was not a iarraney, for breach of which they could repudiace, chat each cab Bee ven ove sit pr day es merely ee of Had the accident occurred at the time when only one cab was in Jpsurets would o9¢ have been liable. Presumably also, ifthe stare- Gibeen untrue ac che time ic was made, it could have been relied Iiwarrancy of present Facts De Macrier Jewel) Led » Bastion Insurance Co Gib jevellers contained the following cerm!: "Warranced road vehi with locks and alarm systems approved by underwriters and in ‘he insured suffered cwo losses. At che time ofthe fist, the locks forboth lostes, seemingly on the ground chat a continuing warranty Jprken before che rst loss. Subsequently, however, chey admieved for che second loss.” It was held chat the insurers were not liable fine loss, as the risk was suspended because the locks were aoc Brel. The term cited, despite the presence of “warranted”, was not @ inthe fll sense, but merely a warranty descriptive ofthe esl ois foe che reasoning in chese cases seems to be thae in nether could fin question be clearly construed as continuing watrancies, presum- ie the language did not sufficiently refer tothe fueure, end they thos te leser categorisation of statements descriptive of the risk, because gd wo the use of property insured. Thete has beea no suggestion chat Geristion would attach to statements on a proposal foem not of this holding in che De Maurier case is lice curious because the term was ot by che insurers but by brokers acting forthe insured, Te seems that ss could have been discharged from all liability on the ground of BOSC. 669, See sea Keer v Angl-Sasin nsurame Co (1927) K.B. 590 Boyd's Rep, $50, Pes cones in a stip, noc ona proposal form as such, chough che eee is Pena forbreach of warranty atthe ime Piste riccsed by Donaldson J. for not having dane soe‘WARRANTIES AND CONDITION: breach of warranty of present facts because che car which was inva first loss did not have the required locks at che time the warranty ag Duc on the facts it was held chat the insurers had waived this ight Ifa statement on & proposal form can be both watrancy 354 present facts, and descriptive of use forthe future, as these decisions the question remains whether ie can be both a continaing wattage statement descriptive ofthe risk. The point arose in Provinial fa Margaa2 the facts of which have already been given, where the de the Couse of Appeal” was firmly based on the ground thatthe se tion and answer were descriptive of the risk. On this analysis he were liable because the lorry was carrying only coal at the time fh ie was the only reason for the decision, and by Lord Wright as sa his main reason which reseed, as we have seen, on the interpretatia ‘question and answer asa continuing watranty. The question aries ‘would have been the resale of che case if che lorry had been caring as well as coal at che time of the accident, On a strict view Buckmaster’s reasoning, with which Lord Blanesburgh agrecd they would still have been liable because there was 0 breach of ei "wacranty as he interpreted it, Against that ate che views of Lords “Wrighe and chose of che members of the Court of Appeal which pla opposite result. The latter is presumably the corsect view, although criticised a8 not designed to let insureds clearly know where thy [As already indicated, more recently the categorisation of clauses ofthe risk has been applied to a term in the body of an insurance 6 ‘well asco a statement on a proposal form. In CIN Cath & Caney li “acids Five & Life Assurance Corp Pl? on renewal of a general policy insuring the plaintiffs cash and carry business, the insuee teem under which the insured “warranced” that cereain antihel ‘measures would be complied with, [twas held chat this was aclaused of the risk and not a warranty in che strict sense. A warrancy i thes is only @ clause which goes "to che root of the transaction berween ti which oughe to avoid or celieve the {insurers} from their libiliy policy” Here, the “warranty” could relate only co wo sections oF which was a general commercial policy wich 12 sections in toa 933) Ac 240 » [1980}2 KB. 1. > Tod Warngon aged wih both Lords Wight nd Bucs > {1989} 1 Loge Rep. 29. Se (1989) JBL m Bankes Le Rv dale Ste sone (1927) KB. 90 Macperon Jin the Gath © Cary cs, above a 302 ety hae poveceng the ive agit ce rk of the wena DESCRIPTIVE OF OR DELIMITING 181 1 Lid © Bunniv (1922] 2 A.C, 413; 2669.53 ofthe Prnnpak Bc sic, he qual of dating inthis rea and che whole swe of ote in iatanc conc eee tobe desired, GAMER B00. Sec9.2 Bes skies wish chs oof analysis. Aknough tis pose forthe win the bench, (340) ofthe MIA), heey allowing the contact his wal alo ake the inser lal forte puted clam Ia Pe Bb te ose of Lox spears 1 have esumed tht inthe absence of Ben ahs a tomas dctarge om lsbtyon breach dec ot Bip ing te whole contac oan cay x would do vn pate 50 Bote avin cae Sx 9.2. Wha sent nod ce se Out str guidlin, i an ape core ae cht propel eon Bis of Tor Cod Lak athe vy of sumac tes in wo yas Rep 1.182 WARRANTIES AND CONDITIONS, been carried out within the prescribed 30 days, although she contended that an inspection had taken place in August, app 90 days after renewal. Morland J. decided thatthe clause comming endorsement, on its fue construction, Was not a Warranty, bap suspense condition. The casonings, with espec, not wholly Ie was held cha because a warraney was “dracon‘an teem”, den vwrters wanted such protection they must “stipulate fri im lege With respect i is dificule co se how the insurer could have stp sm inslf was called warranty and wig in clear and intelligible lnguage, and the consequences of nonsamg were speed out. Ie is difficult to have sympathy wich conameti ‘who, inspite of every effort on che insurer's par o alert chem toda do at comply “The leaned judge aso said thae ic “would be absucd and make basiness sense for claim for propecty damage to be bared fing the sprinkler system was not carried out on ie”. Bepresed i the poine could be said to be irelevane tothe decision on the al stm, Arguably this point goes to materiality and, a we have sen alcy isnot relevant eo warrancies; cae is precisely why they are sch 10) moce satisfactory rationale would be to coisa appropriate term in che light of ies commercial purpose, and ie map be chat this i what Morland J. was doing and that chis is pare micgace che harshness of che law on wareanties. More recent i Frankone Reinwrane Lid » CMM Tast No 1480, Gross). rode th biter, chat «term “warranted vessel fly crewed a all cies" was icing” rather than “promissory”, on the basis that this would ‘commercial purpose of che warracy Yet more cecenly, in Sugar Har Group Lid » Gres Lake Risa le i was said cha it may be easier to construe a “warranty #688 sive condition where the obligation by che iasured is ro comply wil dleadline™™ racher chan where thece isa warranry 2 co sate ofa Here, Burton J. referred to che fllowing passage from che judgment in any cleater corms. The ° [2000] Lloyds Rep LR. 47 a 50, quoting Saville L. in Husain» Boel 1 Lloyd's Rep 627 a 630. 104 Above a p48, 'w ‘Wether maceility oughe to be eeevant is quite a differen sue Se relation o the Privo case and ee discussion relating co reform bel 1 [2006] EWHC 429 (Admley), [2006] Lloye’s Rep. LR. 704, Se a “Aigaie Inserane Co 5A {2008} EWCA Giv 1314, [2008] Lloyds Rep LR ‘where it was accepted by the paces thaca "warranty" of sil soc 988 delimiting 1 [2011] EWHC 2636 (Comm), {2011} Lloyd’ Rep. LR. 198 icing Kler Krinwear © (2011) EWHC 2656 (Comm) a¢ (41), PTIVE OF OR DELIMITING 18: & General Insorance Lid v New Hampshire Insurance Ca! ate Case pearly heel sion of construction, and the presence or sbscnce of the word ps question of ve wareante’ isnot conclusive. One tet is whether ea term that yee gssoie wererally on the cs of loss; a third, whether damages would be an oot ofthe eransicion; the second, whether ic is descriptive of o ry oc inadequate remedy. As Bowen LJ std in Bernard v Fade Fosse I 3 Fin 108 510 2c 3464 cma regu ck mst be a condo! Perce the insure is erly lft om cros-lnim ina mater that goes to che Bice which i wobsinesstke Bp Sagar Hat case, eerms described as warranties and imposing safety Bin an insurance of nighe clubs were held ro be warranties in Conditions Mire been pointed out char insurance policies almose universally lst Berofrerms of the coneract under the heading “Conditioas". While it «, it is probably accurate ea say chat at last some of Be terms do not relace directly tothe risk covered or to statements of fact, fnthe nature of collateral promises or stipulations. Some “condicions feourse, be warranties in the sense described earlier in chis chapter, as Bibeen seen. One further importane reason for distinguishing warrancies Ronddions ocher than chose already considered, even when boch cenms ippear in the same part of a policy, is chat ic has been held ehae ince by an insured with a condition may be dispensed with if itis ity, for example, by reason of information which che insurer Bas fiom another source. The actual decision chat to establith fv be consideced in a later chapter: Ie can hardly apply co warran- Properly so-called, which, as we have seen, must always be stricdly ed with. In acicion, a breach of condition is said to be actionable only ties the loss, whereas, as we have seen, there is no such requirement flies warrancics. Ic should also be noced at chis stage that it has been hat breach ofa condition precedent can only be waived by estoppel and BBN Loy Rep. 12.596 2 C101 Ay -ecndia® here esas wernt 8 we hae dsb Betis ssc of eying pas snl burglar lars. A sna ele was each DAC Wide Son Led» Cat Pa Ld (2008) EWHC 3583 (Comm), opel 30L Bilton Mor Pcs Lit (1966) 2 AMER. 972. aun. Bi tee spa (19701 QB. 490; 39.4.1184 WARRANTIES AND CONDITIONS not by election! this is che same principles applies owanee gl wartanty as described earlier” This is also consi 9.10 Nature of Conditions Condition dat ar in the nature of colltct ems ae there are promics or obligations imposed on the ‘aaa aa repind eo the dims procelure, which ae not made fall vali ofthe contrat Second ae conditions con ng gh nil then repesting or enlarging sights given by the cud conciios governing subrogsin rights aod he igh i contol proceedings by or against thei inc, and contig double insurance, Detaled consideration of the usual oblige conferred by this sore of condition will be given in subsequent chapeam “questions kobe conierd here ae Hs heel of onder il tatoos on the iwored namely whether they ar preadaall Tibi foc a paricular os or whether upon breach the inurl dghe co aim damages for such ls sic es sled,” and sel of proof where cis alleged tha: there ha been a beach of pl 9.11 Conditions Precedent or Mere Conditions Ir can be particularly diffcule eo determine the exact status tb requiting the insured to give prompt notice of any occurcence likly rise to a claim." Such cerms are common, and can often be the ligation,”?* but are often diferencly Inbelled. ‘The craditonal an 16 Kumar Vila Holidye Ble © Tact of Symdiate 1243 (2008) EWCA Gl [2008] Lloyds Rep, LR. 489, 1 S09. "8 See LAL, 1 Te may not be eagy for the insurer to prove the aecessary caus in breach of « mece condition an los oes to beable ro recover more Hi ‘nominal damages: see Porters ZerichIntnance Company (2008) ENEHGH {2010} Lloye’s Rep. LR. 373. tn alton Reyer BC » Nady (2011) BM (TCC), a flor co give notice ia time in breach of a mere condos i policy mas held to have lose the insurers the chance to prove car cheis ot been negligent. They were eneieled to deduct 13 percent from ig to the insured, 12 For whet constitutes ikely in chis concext, se Jacob « Cote (I Gnomes Srvice Station) and Avse Inarance (Third Party) (2000) LR. 506, Laybor » Lowe [2000] Leyes Rep. LR. 510. 1a Sue che dium of Potter LJ in Vir Ga Life HubigrPle(2000) ON 159 ac 162, where e sid thatthe isue of whether » parcial rem precedent co che libilicy fan insures won ari i che canter of Insurance corrace governing claims proces...” (emphasis added IPONDITIONS PRECEDENT OR MERE CONDITIONS 185, Girioos is icher chacchey are conditions precedent to the bringing, Hoc thee they ace suspensive conditions or that they are metely Kanditions, giving rise only co a claim for damages by the m, however, that such matters, which cannot objec- ded ss Fundamental co the validity of the contract, can be Hpmeneal by appropriate wording and in some ways equivalent eo jnthe sense we have described ther. For example, in Gex v Orion 12 the Court of Appeal held char a breach ofa condition relating ing of pasciculars of loss entitled the insurer ro creat che whole is repudiated because the policy contained a provision making its Neonditions precedent to any liability ofthe company to make any Hades chis policy”. In Kezahitan Wool Procasors v Nederlandsche fring Mactscbappij NV,” there was a very wide ranging term fhe insured co Full each and every obligation of the claims process jnsuer stipulated before ic would pay out upon loss. The Court of Bef hield thac such 2 term could be a condition precedent co all fueure lander the policy. Bes no reference to che sores of condition in question being prece tbe insurer’ liabliy, then iis clear that a breach does not encele the jrepudiaee liablicy. The Coure of Appeal in Friends Provident Life & Wide Sirus International Tnourance!® bas confitmed that this is the and rejected or overruled a number of decisions!” where i had been ‘condition chat did noe expressly provide as to its effect could be re term! and thac repudiation of 2 claim would be allowed if demonstraced a clear intention by the insured not to continue to Be Clacke, The Law of Iarance Contract, Sth ed, (2002) para.26-2G.WARRANTIES AND CONDITIONS make a claim of ifit caused che insucer seious enough conse coving whac had been che ereitional view, as refered to abe stressed that i is casy for insurers to spell out che effect of cong want co make performance of it precedent to ti abi Often, however, in any event policies wil contain some gene to their conditions being condicions precedent, iF not a specie n pura condton Th aly ea protec all ties where heres general declaration, but wih Ball lib, perhaps Because the obligation cereus can oly an obligation on the insure ln In Lndos Garena Co Furl. fo example, «Bali ly aa sapere tet himself gen: che raga employee bed » condition which eequred ¢he insu Sg employe suspected when «chim had been made ad eg ET the later oobi embursereat rm the employe ofall insret a ible a pay. Clearly he tecond pare fei coll be precedent co the insure’ lability since coud aly opel iby was eased. Dspce tha, che sory of the Howe with some heaton, hed eat the fit part ws acon al the policy contsned general decastion co cat elles andi wer septate and indepedet contrast isthe dein in Re Bradley and sx 6 Safle Atal token ou by sme, condo 5. Tete wat nda: geal al thee hat the condions wee precedent the lig Gondion 5 contained thre tenencs, The fae provided eal tvs co be regaled by the amount of wage nd le al the second fequed the keeping of « proper wags baie required dhe insured to apply information co he inure al tod salais pi. The nsare, who only bad ne employe il mains a wages book ud the insurer relied upon hs deny ll parca im By a majoky che Court of Appl held ha ol not guity of «betch of ondton precedent. According ® See Davey, "Tnsursnce claims notification clause: innominace ces al good faith” (2001) JB.L. 179. » For comments, ee Bind, “Innominate cerms in insurance contac (206) 543, Lowey and Rawlings (2006) LM.CLQ. Bue not alway, a8 we have °° (1880) 5 App. Cas. 911 911K. A, IGONDITIONS PRECED MERE CONDITIONS 18; Peso considered. A policy of this nacure, in case of ambiguity or Be tre guia the oie) ™ The jlmen of arvll Bie came effect, chough his reasoning is much broader; he would ee thar the insured be informed of and consent to conditions prec: , fh one can applaud the Court of Appeal’s determination co ensure Ge ideorical*° It is probably fairly safe to suggest that a genera The Onus of Proof breach of condition, “ies axiomatic ini Asics always for an insurer to prove an exception, so itis for him to the breach of « condition which would relieve him from liabilicy for a less.” Ics, however, possible for the wording of a policy co afect Ppiit is clear thar very clear words would be required eo place the onus ng thar he complied with a condition on che insured."** Practice in and Reform of the Law of Warranties and Conditions Fave seen at various poines in this chapter, many aspects of che law of ies, in particular the basis of the contract clause, have ateracted Behe cares ccocexning offer anc acceprance in che insurance concent, discussed as, MacKinnon LJ, in Woe » Reyed Bxchange Acserane (1939) 1 K.B. 294 at 311 Pe Towler J in Kacakwtan Wont Proctns v Nodrlandiche Creimerscoring Meters NV (1999) loys Rep. LR. 596 at 601 Peon! Godard Cin Bond Air Servis Lad Hill 1995) 2 QB. 417 at 427 bore 4283WARRANTIES AND 188 CONDITIONS criticism from judges and others. The years ago by the Law Commission” along wich their examinatigg ‘duty of disclosure. The recommended that a term should not be fa warrancy unless it was material and that the device of the bas should be abolished. Further, they would have allowed an insane 4 diate a claim on discovering a breach of warranty only if dhe b cousally connected with the loss. "As we have seen, the currene project of che Law Commissions has in the abolition of the basis clause in consumer contracts. They di their inieial Report make recommendations as regards other wats consumer conteacts, taking the view char these are not found coday some extenc thei use isin any event controlled by provisions in che ng Conduct of Business Sourcebook, as described in 9.15.1. Tes expected the current project of the Law Commissions will make further recom tions for reform covering all insurance contracts, although the curren cale indicates that these ate not likely to emanate until the end of 2013 ‘accual legal reform may have co wait until some time after ch Theit views have changed over the period of their examination gf current law and consideration of reform possibilities. Their provi recommendations" were similar in some respects to those recomm the easlier Law Commission Report, in particular regarding the need ‘causal connection between bresch and loss, alchough they considered this might not be a mandacory rule in business insurance. They abo p sionally propose for business insurances @ reasonable expectations appr so chat a breach of warranty of similar rerm would not be actionable if term rendered the cover diferent ftom what che insured reasonably However, these views proved somewhat controversial.“ The most Consultation Paper"? concains three provisional recommendations they recommend the abolition of the basis clause in. business ins Secondly, chey recommend that a breach of warrenty should resi suspension of che risk rather than leading co an aucomacic discharge of become in effect case insurer from lability. Waranties would chus 104, 1980 Cmad. 8064. See Birds, "The reform of insure Hy Report No od becnate of thee obvions [1982] JB. 449, Warranties were considere Ivhen aching fom the contents ofa proposal form, with disclosure and BRR the proposed EC Directive 0a insurance contract law concined prowsio# tlled om the French lw of aggravation du risque corresponding in some #8 the English law of wacrances. See the Consultation Paper LCCP 182/ SLEDP 134, June 2007. Nore the laues Paper 5 of Apri 2009, which suggest chac any el might be coofined ¢o small businesses, For det fou fei ied aa relating to warrant sure fof the Consultation Paper asic applied co warranties, see faatit: the absolute end2* [2007] LMCLLQ. 474. 42 {OCP 204/SLCDP 155, June 2012. ke, CB IN AND REFORM OF THE LAW 189 « vsk oF suspensive conditions as we have described chem Indl, they © breach of any term designed to reduce the ype of rds 2 loss oF Ei paricolas (7 ink th loss should be effective only as re f tesurance Conduct of Business Sourcebook Gp concer warranties and conditions, Rule 8.1.2 of ICOBS a follows: consumer plicyholde’s claim is unreasonable, excepe where is for beeach of warranty or condition unkss che ch and wales (oe a pare Bein 08 scion conta rocher” contract, the warranty relates co scarement of the statemene had been made ould baer «ie 7 fact concerning the life to be assured and, if foie life to be mssured under an “own lie” contract, the insurer ae ejected the claim under this cule; or Ub che wae tata othe sik and was deawa othe customers tere tio before the concesion of the contract. Jay poinc hers isehe requirement of x causal link