Nature of warranty
(1) A warranty, in the following sections relating to warranties, means a promissory warranty, that is to say, a warranty by which the assured undertakes that some particular thing shall or shall not be done, or that some condition shall be fulfilled, or whereby he affirms or negatives the existence of a particular state of facts.
(2) A warranty may be express or implied.
(3) A warranty, as above defined, is a condition which must be exactly complied
with, whether it be material to the risk or not. If it be not so complied with, then,
subject to any express provision in the policy, the insurer is discharged from
liability as from the date of the breach of warranty, but without prejudice to any
liability incurred by him before that date.
When breach of warranty excused
(1) Non-compliance with a warranty is excused when, by reason of a change of
circumstances, the warranty ceases to be applicable to the circumstances of the
contract, or when compliance with the warranty is rendered unlawful by any
subsequent law.
(2) Where a warranty is broken, the assured cannot avail himself of the defence that the breach has been remedied, and the warranty complied with, before loss.
(3) A breach of warranty may be waived by the insurer.
Express warranties
(1) An express warranty may be in any form of words from which the intention to
warrant is to be inferred.
(2) An express warranty must be included in, or written upon, the policy, or must
be contained in some document incorporated by reference into the policy.
(3) An express warranty does not exclude an implied warranty, unless it be
inconsistent therewith.
Warranty of neutrality
(1) Where insurable property, whether ship or goods, is expressly warranted
neutral, there is an implied condition that the property shall have a neutral
character at the commencement of the risk, and that, so far as the assured can
control the matter, its neutral character shall be preserved during the risk.
(2) Where a ship is expressly warranted ‘‘neutral’’ there is also an implied condition that, so far as the assured can control the matter, she shall be properly
documented, that is to say, that she shall carry the necessary papers to establish her neutrality, and that she shall not falsify or suppress her papers, or use simulated papers. If any loss occurs through breach of this condition, the insurer may avoid the contract.
No implied warranty of nationality
There is no implied warranty as to the nationality of a ship, or that her nationality shall not be changed during the risk.
Warranty of good safety
Where the subject-matter insured is warranted ‘‘well’’ or ‘‘in good safety’’ on a
particular day, it is sufficient if it be safe at any time during that day.
Warranty of seaworthiness of ship
(1) In a voyage policy there is an implied warranty that at the commencement of
the voyage the ship shall be seaworthy for the purpose of the particular adventure
insured.
(2) Where the policy attaches while the ship is in port, there is also an implied
warranty that she shall, at the commencement of the risk, be reasonably fit to encounter the ordinary perils of the port.
(3) Where the policy relates to a voyage which is performed in different stages,
during which the ship requires different kinds of or further preparation or
equipment, there is an implied warranty that at the commencement of each stage
the ship is seaworthy in respect of such preparation or equipment for the purposes
of that stage.
(4) A ship is deemed to be seaworthy when she is reasonably fit in all respects to
encounter the ordinary perils of the seas of the adventure insured.
(5) In a time policy there is no implied warranty that the ship shall be seaworthy at any stage of the adventure, but where, with the privity of the assured, the ship is
sent to sea in an unseaworthy state, the insurer is not liable for any loss
attributable to unseaworthiness.
No implied warranty that goods are seaworthy
(1) In a policy on goods or other moveables there is no implied warranty that the
goods or moveables are seaworthy.
(2) In a voyage policy on goods or other moveables there is an implied warranty
that at the commencement of the voyage the ship is not only seaworthy as a ship,
but also that she is reasonably fit to carry the goods or other moveables to the
destination contemplated by the policy.
Warranty of legality
There is an implied warranty that the adventure insured is a lawful one, and that, so far as the assured can control the matter, the adventure shall be carried out in a lawful manner.
There are two types of warranties:-
1) EXPRESS WARRANTY:- An express warranty is the warranty, which must be
included in, or written upon the policy, or must be contained in some document
incorporated by reference into the policy.
There are a number of express warranty in marine insurance like warranty of
neutrality during war, institute warranty etc. But a common example with reference
to H&M policy being a warranty that the vessel is classed with a particular society
and that her class will be maintained. The wording is likely to be, for example “
warranted LR classed and class maintained”
2) IMPLIED WARRANTY:- These are not written in the policy but are implied by
the law to exist in the contract. They must be strictly complied with in the same
way as expressed warranties. There are two major implied warranties in marine
insurance policies covering seaworthiness and legality.
a) Seaworthiness:- With reference to H&M policy, if the policy is voyage policy,
there is an implied warranty that at the commencement of the voyage, the ship
shall be seaworthy for the purpose of particular adventure. A ship is deemed to be seaworthy when reasonably fit in all respects to encounter the ordinary perils of the sea of the adventure insured.
But if it is a time policy, there is no implied warranty that the ship shall be seaworthy at any stage of adventure but where, with the privity of the assured , the ship is sent to the sea in an unseaworthy state, the insurer is not liable for any loss attributable to unseaworthiness.
b) 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.
AN EXPRESS WARRANTY DOES NOT OVERRIDE AN IMPLIED WARRANTY UNLESS THE TWO CONFLICT.