Classification of terms in marine insurance contracts in the context of contemporary developments

Abstract

As the law governing marine insurance contracts is rooted in the common law, one would expect it to follow the common law classification of contractual terms. By considering the changes in contemporary practice as to classification of terms in insurance contracts, it is possible to draw various conclusions. When a marine insurance contract is automatically terminated upon the happening of the specified event, just like breach of a marine warranty, the insurer is discharged for any liability which have not crystallised until that time. The remedy of automatic discharge makes it impossible to apply waiver by election in the context of breach of warranty simply because by the occurrence of the breach the insurer is automatically discharged from liability and accordingly he cannot be put to any election. The London market has responded to these developments by moving away from the traditional warranty regime in the International Hull Clauses 2003 in a number of instances.