WARRANTY
WARRANTY IS A CONDITION WHICH MUST BE EXACTLY COMPLIED WITH, WHETHER IT BE MATERIAL TO THE RISK OR NOT. IF IT IS NOT SO COMPLIED WITH, THEN, SUBJECT TO ANY EXPRESS PROVISION IN THE POLICY, THE INSURER IS DISCHARGED FROM LIABILITY AS FAR FROM THE DATE OF THE BREACH OF WARRANTY, BUT WITHOUT PREJUDICE TO ANY LIABILITY INCURED BY HIM BEFORE THAT DATE.
THE BREACH OF WARRANTY CAN BE EXCUSED WHEN, BY REASON OF A CHANGE OF CIRCUMSTANCES, THE WARRANTY CEASES TO BE APPLICABLE TO THE CIRCUMSTANCES OF THE CONTRACT, OR COMPLAINCE WITH THE WARRANTY IS RENDERED UNLAWFUL BY ANY SUBSEQUENT LAW.
THE ASSURED CANNOT AVAIL HIMSELF OF THE DEFENCE THAT THE BREACH HAS BEEN REMEDIFIED ONCE THE WARRANTY IS BROKEN. BUT SOMETIMES THE INSURER CAN WAIVE THE BREACH OF WARRANTY.
Scenario 1 One of the consignments is urgent. M/S Shipping Company knows in advance that weather may get rough in 3-4 days’ time. It cancels one cargo but does not cancel the other one. If any loss or damage to the cargo ship (during transit) happens, M/S Shipping will not be entitled to insurance benefit. Knowing the sea peril, it still carried on. This is clear breach of warranty.
Scenarios 2 Suppose the consignment is safely delivered to the consignee. Upon receiving the packaged goods, everything seems in fine condition. As the goods reach the warehouse, upon opening the package, the consignee notices damage to certain packages. It is likely that the insurance contract will still stand cancelled, as goods might have been damaged during the sea journey. Since M/S Shipping was aware of the risks, it continued thereby breaching the warranty.
TYPES OF WARRANTIES:
- EXPRESS WARRANTIES: ARE THOSE WARRANTIES WHICH ARE EXPRESSLY INCLUDED OR INCORPORATED IN THE POLICY BY REFERENCE.
- IMPLIED WARRANTIES: THESE ARE NOT MENTIONED IN THE POLICY AT ALL BUT ARE TACITLY UNDERSTOOD BY THE PARTIES TO THE CONTRACT AND ARE AS FULLY BINDING AS EXPRESS WARRANTIES. SOME IMPLIED WARRANTIES ARE: A) SEAWOTHINESS OF SHIP– THIS SHIP SHOULD BE SEAWORTHY AT THE PORT OF COMMENCEMENT OF THE VOYAGE AND IS FIT TO ENCOUNTER ANY ORDINARY PERILS OF THE SEA AND DIFFERENT STAGES OF THE VOYAGE TILL IT IS COMPLETED. B) NO CHANGE IN THE DESTINATION OF THE VOYAGE-IF THE DESTINATION IS CHANGED INTENTIONALLY AFTER THE INCEPTION OF THE RISK, THE MARINE INSURANCE COMPANY IS NO MORE RESPONSIBLE FOR COVERING THIS VOYAGE. C) NO DELAY IN THE VOYAGE– THERE SHOULD NOT BE ANY DELAY IN STARTING THE VOYAGE WITHOUT A VALID REASON AND IN CASE THERE IS A DELAY THAN THE INSURER HAS ALL THE RIGHTS TO REFUSE TO GIVE THE COVERAGE IN THE ABSENCE OF ANY LEGAL REASON. D) NO DEVIATION– THE LIABILITY OF THE MARINE INSURER ENDS IF THERE IS A DEVIATION IN THE JOURNEY ROUTE EVEN IF THE SHIP COMES TO ITS NORMAL ROUTE BEFORE THE LOSS. E) LEGALITY: THERE IS AN IMPLIED WARRANTY THAT THE ADVENTURE INSURED IS A LAWFUL ONE AND THAT, SO FAR AS ASSURED CAN CONTROL IT, THE ADVENTURE WILL BE CARRIED OUT IN A LAWFUL MANNER.