Report No. 21
Clause 36
General cases where breach of warranty excused.-This deals with the cases where breach of a warranty is excused. The excuse may arise from the following:-
(a) change of circumstances;
(b) subsequent law;
(c) waiver by the insurer;
(d) provision in the policy itself to the effect that the right to avoid the policy will not be exercised by the insurer.
As to (a), the usual example is the warranty "warranted armed" inserted during the war, which becomes obsolete if peace is declared.
As to (b), it merely embodied the general principle that if the performance of the contract becomes illegal, it need not be performed.
As to (c), see section 34(3) of the English Act.
As to (d), it is usual to insert a clause in the Disbursement warranty which ordinarily provides that "a breach of this warranty shall not afford underwriters any defence to a claim by owners, mortgagees or other parties who may have accepted this policy without notice of such breach and are not parties or privy thereto."1
1. For an explanation of the Disbursements Warranty, see Dover, p. 152, bottom and succeeding pages. See also notes under section 13, English Act-clause 7(7).
Back
