Question

Conclusion of marine and fire insurance.

Answer 1

The term utmost good faith is always an intriguing one. According to the Marine Insurance Act of 1906 we can see that how a contract of marine insurance should take place with the principles of utmost good faith, duty of disclosure by assured and the agent and many other principles. But interestingly we find that avoidance is the only possible remedy which is available for the breach of duty of utmost good faith. Further we can see that how the doctrine of pre contractual good faith developed through certain cases like Pine top case which stated that insurer did not have right to avoid the contract but later it was changed. In Banque Keyser Ullaman SA V Skandia the Court held that both the insurer and the assured had reciprocal duties toward utmost good faith. The CTI case held that there should be disclosure of every previous claim to maintain utmost good faith or the contract can be avoided. Thus we can see that there has been a development of doctrine of pre contractual good faith in the Marine Insurance Act of 1906.