A Critical Assessment of the Requirement of Utmost Good Faith in Essay

A Critical Assessment of the Requirement of Utmost Good Faith in Marine Insurance Contracts - Essay ExampleHowever, in a world with modern technological methods of obtaining and sharing information, the duty of outcome good opinion, contributionicularly the duty to disclose all(a) material information appears to be a bit approximative.5 More troubling perhaps is the fact that a failure to disclose material facts, regardless of the absence of fraud or specific function renders the contract voidable ab initio. As such the result can be entirely disproportionate and unduly harsh. However, it is accepted that the insurers not only undertake risks but assess them based on the facts known to them at the time of underwriting the risk. It therefore follows that information solely in the possession of the insured is of the essence(p) for this purpose.6 This question study provides a critical assessment of the duty of last(a) good faith in marine insurance contracts with a view to det ermining the rule for the duty and whether or not the duty can and should be reformed. The main issue is whether or not reforms can equitably address the harsh consequences and to hold in that the duty to disclose corresponds with the realities of the relationship between the insured and the insurer and the current state of modern technology. This paper is therefore divided into three parts. The first part of the paper examines the origins of the duty of utmost good faith in the common law. The second part of the paper examines the developments of the duty of utmost good faith and the final part of the paper analyses possible reforms that can effectively create more balance between the insured and the insurer having regard to the purpose of the doctrine of utmost good faith and modern technological advances. I. Origins of the Duty of Utmost Good... This essay stresses that insurance contracts in general represent a special class of contracts since they argon bound by the uberrima e fedei doctrine. As a result all contracting parties go for a duty to ensure that they do not misrepresent crucial facts and are likewise under a persistent duty to disclose all facts that might induce insurers to assume the risk. Understandably, the duty of utmost good faith was necessary during the 18th century. However, in a world with modern technological methods of obtaining and sharing information, the duty of utmost good faith, particularly the duty to disclose all material information appears to be a bit harsh. This paper makes a conclusion that the duty of utmost good faith or uberrimae fidei sets an unrealistic mellowed standard on the insured and functions to liberate the insurer to such an extent that insurance claims can be avoided for the slightest misstep on the part of the insured. The duty of utmost good faith, although 200 years old, has evolved about as far as the courts can take it. It is obvious that over the last 10 years of so, the courts have taken as much latitude as the separation of powers will allow to modify the existing doctrine so as to minimize the harsh results. However, the courts are bound by the implementation of the Marine Insurance Act 1906 which is perhaps the most likely reason for the perpetuation of the unjust functioning of the duty of utmost good faith.