By Yamini Rajora, National Law University, Jodhpur
Editor’s Note: The nature of the contracts changes with the developments in business environments. Most contracts entered into by ordinary people today are not in fact the result of individual negotiations. Even insurance contracts are similar to such contracts of adhesion since one party holds a stronger bargaining position in the contract and this is usually the drafting party, whereas the other party holds a weaker position and this is usually the accepting party. The existing provisions of the the Indian Contract Act show that the legal control is not quite adequate to come to the rescue of the weaker party against adhesion contracts and to meet the needs of the changing times.
The device of a new type of contract i.e. standard form contract or a contract of adhesion is common in today’s complex structure of giant corporations with vast infrastructural organization. The use of standard terms and conditions is confined not only to contracts in commercial transactions, but contracts with public authorities, multinational corporations, or in banking and insurance business etc. Contracts of adhesion have become common place in the trade practices of the 20th and 21st century. They are found in almost every branch of industry and commerce, consumer contracts, employment, hire-purchase, insurance, administration, any form of travel, or the courier services, or while downloading software contracts from the internet, etc.
Adhesion contracts are the standard form contracts wherein the contract is drafted by one party (usually a stronger party) and it is signed by another party (usually the weaker party) who has no power to negotiate or modify the terms and conditions of the said contract. Such contracts are entered into on an unequal basis because of the difference in the bargaining powers or position of the contracting parties.
Insurance contracts can be considered as contracts of adhesion since there is little or no actual bargaining at all relating to the terms and conditions of the contract. The proposer may set conditions to suit his needs but the terms in the printed form of the contract are the only conditions that the insurer is prepared to contract upon.
The doctrine of fundamental breach of contracts states that the party commits a breach of the contract that is so fundamental that it deprives the innocent or the weaker party of substantially the whole of the contract’s benefits, in addition to, entitling the distressed party to sue for damages. There is usually an exclusion of liability clause in insurance contracts which is taken up by the insurance companies as a defence in case of a breach. The fundamental breach of contracts such as insurance policies has to be examined on case-to-case basis since such contracts are used for a large number of participants. The interpretation of such contracts should be in a manner that is favourable to the insured since the policy is in a standard form contract and is prepared by the insurer alone.
This project aims to establish that the nature of insurance contracts is similar to that of the contracts of adhesion since the position of the parties in both the parties is similar. One party holds a stronger bargaining position in the contract, and this is usually the drafting party, whereas the other party holds a weaker position and this is usually the accepting party. The other party most of the time, has no option but to accept the terms and conditions of the contract. Similar is the case in insurance contracts, where there is little or no negotiation at all regarding the terms of the agreement. The insurance company prepares the policy and its terms on which the insured is expected to sign.
This project work further goes on to discuss the liability of the corporation in event of breach of the contract and the interpretation of the terms of the contract in the favour of the weaker party when a fundamental breach of the said contract occurs.
The existing provisions of the Indian Contract Act, 1872 show that the legal control is not quite adequate to come to the rescue of the weaker party against adhesion contracts. In the majority of cases where breach of the contract occurs due to the superior party, the courts may not be able to help the weaker party, who enter into such contracts, either due to inequality in bargaining power or out of necessity, because all such cases do not fall within the four corners of Sections 16, 23 or 27 of the Indian Contract Act, 1872.
Most contracts entered into by ordinary people are not in fact the result of individual negotiation. An employee’s contract of employment will, for example, be determined by a collective agreement between trade unions and the employers.
The standard form contracts have varied names, the French call them “Contracts d’adhesion”, and the Americans call them “adhesion contracts” or “contracts of adhesion”. In Black’s Law Dictionary[i], ‘Adhesion contracts’ are defined as follows:
“A standard-form contract prepared by one party, to be signed by the party in a weaker position, usually a consumer, who has little choice about the terms. Also termed Contract of adhesion; adhesory contract; adhesionary contract; take it or leave it contract; leonire contract.
Some sets of trade and professional forms are extremely one-sided, grossly favouring one interest group against others, and are commonly referred to as contracts of adhesion. From weakness in bargaining position, ignorance or indifference, unfavoured parties are willing to enter transactions controlled by these lopsided legal documents”
Adhesion contracts include all form contracts submitted by one party on the basis of this or nothing. Adhesion contracts are defined as agreements in which one party’s participation consists in his mere adherence, unwilling and often unknowing, to a document drafted unilaterally and insisted upon by what is usually a powerful enterprise.[ii]
These are the contracts in which the party with relatively weak bargaining power adheres to the terms of a mass form which has incorporated limitations on the liability of the drafting party. One party “adheres” to the terms prescribed by the other. The adhering party consents but he lacks bargaining power to affect the terms to which he consents.
Contracts of adhesion or standard form contracts have many attributes such as it consists of a printed form containing several terms and conditions in the form of a contract, the contract is drafted by one of the contracting parties, the drafting party engages in a volume of the same types of transactions on a regular basis, the party further imposes the form on the consumer on a take-it-or-leave-it basis, the other party will usually sign the contract after minimal, if any, negotiation, the other party does not similarly engage in a volume of the type of transaction at issue and lastly, the primary obligation of the other party is usually to pay money.[iii]
Thus the characteristics, usually and traditionally associated with a contract, such as freedom of contract and consensus ad idem are significantly absent in these so-called standard form contracts.
The contract of adhesion shares in the never-ending legal struggle between freedom and restraint.
In such standard form contracts, the freedom of the contracting parties is limited as these contracts are offered on a give-or-take basis. Often the offeree has no other option available to him but to accept the proposal. This raises a question that whether there is freedom of contract available to the parties entering the contract. The only option available to the party is to either accept the terms of the contract in toto or to go without.
“Freedom,” recognizes the privilege of a contracting party to enter and perform a contract. Freedom is effectuated by governmental forbearance and violated by governmental action which either proscribes or prescribes the terms of a contract.”Freedom,” also recognizes the power of a contracting party to enlist the aid of a court in compelling performance or in redressing a breach of contract.
The main problem with adhesion contracts is that since these contracts are prepared by parties with greater bargaining power so it is difficult to determine that whether consent given by the parties is real or not.
The form of interpretation employed in such contracts is different from the general contracts as general contracts are entered into after negotiation between the parties having an equitable semblance of bargaining power, primarily to protect the weaker party, and they also ensure that unfair terms that were not consented to or unconscionable terms are not enforced.[iv]
Adhesion contracts have a stricter form of interpretation because of the increased burden on the weaker party. Difference between consent to be contractually bound and consent to the terms of the contract is critical to the interpretation of the contracts since it cannot be determined that whether the consent given is real or not in such contracts. Therefore, the manner in which the terms of the contracts are presented to the other party is an important rule for interpreting the fairness of the contract.
The doctrine of unconscionability is also used for the interpretation of these contracts. This is to invalidate the contract after it has been formed on the basis of evaluating individual terms while looking at the overall impact on the parties and also considering if the agreement is a fair one. The test of reasonability is also applicable when these contracts are interpreted. The question to be answered in such cases is whether a careful person or a prudent person would enter into such a contract by agreeing on such terms.[v]
Insurance is a contract whereby one party, called the insurer, in return for a consideration, called the premium, undertakes to pay to the other party, called the insured, a sum of money or its equivalent in kind upon the happening of a specified event that is contrary to the interest of the insured.[vi]
The purpose of insurance contracts is to restore the position of the insured to that before the loss-causing event occurred. Insurance contracts are governed by the general law of contract contained in Indian Contract Act, 1872.
Insurance contracts are contracts of adhesion, and try to protect the weaker contracting party against the harshness of the common law and against what they think are abuses of freedom of contract.[vii] It is difficult to determine whether and to what extent a contract for instance that of insurance, is a contract of adhesion. Since insurance policy language is usually standardized and offered on a “take it or leave it” basis, courts consider insurance agreements necessarily to be contracts of adhesion.
A contract of insurance between an insurance company and a large corporation may well be in standard form but the latter generally has both the right and the ability to demand the insertion of special clauses if necessary. Consequently, all ambiguities are construed against the drafter and in favor of the insured. Courts also justify the ambiguity doctrine with simple reference to the fact that most insurance policies are drafted on standard forms.
The reason for the rule on construction of adhesion contracts is that the insured usually has no participation in the arrangement or selection of the words used, and that the language of the insurance contract is selected with considerable care and deliberation by legal advisers and experts employed by, and acting exclusively in the interest of, the insurance company, which, therefore, is at fault for any uncertainty or ambiguity in the insurance contract.[viii] There are other statements or reasons for the rule.
Burne v. Franklin Life Insurance Company[ix] was an action for the recovery of double indemnity death benefits under a life insurance policy. The court also held that a life policy provision that accidental double indemnity death benefits would not be payable if “death of the insured shall occur while any premium is being waived under any disability benefit attached to or incorporated in said policy” did not preclude double indemnity benefits because such a provision was contrary to public policy, and that such a provision, when read in conjunction with the entire waiver of premium supplement, created an obvious ambiguity. The court stated: “To predicate liability under a life insurance policy upon death occurring only on or prior to a specific date, offends the basic concepts and fundamental objectives of life insurance and is contrary to public policy.”
· Construction of Insurance Contracts as Adhesion Contracts
American Jurisprudence 2d states that –
The rule that insurance contracts are to be construed most strongly against the insurer has been repudiated professedly in one jurisdiction, but it is to be observed that in repudiating the rule such court stated that it followed the sounder view that the intention of the parties, as gathered from the whole instrument, should prevail. Considering the so called ‘repudiation’ together with the adopted view, it seems doubtful whether the rule of this court is necessarily in conflict with the general rule of construction in favour of the insured, as the latter is understood, applied and stated, since the general rule is employed only in cases of ambiguity or uncertainty when the intention of the parties cannot be determined by the application of the ordinary or other, rules of construction.”[x]
The ambiguity doctrine is a rule of construction which holds that any ambiguity found in insurance contracts must be construed strictly against the insurer.[xi] The ambiguity doctrine has evolved as a distinct doctrine of insurance law and is applied wherever the language of the policy is ambiguous, regardless if the policy is drafted by the insurer or the insured or what the bargaining position of each party was at the time of drafting of the policy.
The rule that an insurance policy will be construed strictly against the insurer and liberally in favor of the insured is applicable to all types of insurance policies.[xii] Ordinarily, no term, phrase, or clause can be disregarded or rejected in construing the insurance contract as a whole.[xiii] However, the court is justified in ignoring or rejecting part of the language of the policy where, in view of the subject matter, it is inapplicable, meaningless, inoperative or inconsistent.
The court can ignore part of the language of an insurance policy where to give it, effect would lead to an absurd or unreasonable result, defeating the evident intention of the parties and the purpose and object they had in view when entering into the contract.[xiv]
In LIC of India and Anr. v. Consumer Research Center and Ors.[xv], it was held that any authority in the field of insurance has a public duty to evolve insurance policies such that they contain fair and just terms and conditions and are rendered accessible to all segments of the society for insuring lives of eligible persons. The position of law in United States and United Kingdom was also referred in this case and it was observed that unreasonable terms of an insurance contract will not be enforceable as was applicable in adhesion contracts as well. It was also noted that as long as the contracting parties had equal bargaining power in a contract for commercial transaction, the contract would be binding.
In the case of Central Bank of India v. Hartford Insurance Co. Ltd.[xvi], the Supreme Court stated that the rule of contra preferentum would be applicable to insurance contracts as well. As the policy is prepared by the insurer alone in a standard form contract, therefore, it should be interpreted in a manner favorable to the insured.
The decision of the Delhi High Court in Usha International Ltd. v. United India Assurance Co. Ltd.[xvii] explained the principles of interpretation that are to be applied to an adhesion contract of insurance. The court observed that prospective policyholders usually do not read the policy carefully which is in standard form. This results in the insured being the weaker party in the insurance contract due to non-reading of the terms in the contract. The insurance corporation becomes the stronger party with greater bargaining power. Therefore, the contracts are to be understood in their ordinary meaning unless the terms of the contract are shown to have been negotiated equally between the contracting parties.
Sometimes the party drafting the insurance policy or the contract may put in certain clauses that may provide unfair advantage to the drafting party or may limit the liability of the party in event of breach of the contract. The result of such clauses is that since the other party is in a weaker position and has lesser bargaining power, therefore, the drafting party assumes greater bargaining power and in event of breach of the contract, the drafting party can avoid liability. The weaker party may also be denied of the advantage or the rights conferred under the contract.
The (English) Unfair Contract Terms Act, 1977 which came into force on February 1, 1978, tries to improve the condition of Business Contracts, by completely overruling certain types of exemption clauses and subjecting all of them to the test of reasonableness. Following are the important effects of the act[xviii]:
The Act is the pioneer for providing for the very first time, a statutory definition of the term “negligence” which is applicable to both tort and breach of contract. As per the definition, negligence means:
a) Breach of any obligation, arising from the express or implied terms of a contract, to take reasonable care or exercise reasonable skill in the performance of the contract;
b) Breach of any common law duty to take reasonable care or exercise reasonable skill (but not a stricter duty or;
c) Breach of the duty of care imposed by the Occupiers’ Liability Act, 1957
The second important effect is that any clause in a contract which exempts or restricts liability for death or personal injury resulting from negligence shall be absolutely void by the virtue of this act.
The third important effect is that Section 11 of the Unfair Contracts Terms Act, 1977 says that in respect of any loss caused by the breach of contract, any restricting or excluding clause shall be void unless it satisfies the requirement of reasonableness. A term will be regarded as reasonable if it is “a fair and reasonable one to be included having regard to the circumstances which were, or ought reasonably to have been known to or in the contemplation of the parties when the contract was made.”
The four provision deals with the protection of the consumer and those who have been subjected to a standard form contract. The Act says that a person, who deals with a consumer on his own terms, will not be allowed to claim protection of any of the clauses restricting or excluding his liability, if he himself commits breach; nor can he claim specific performance.[xix] He can take the advantage of such terms only if such terms are reasonable.
· Liability of the Insurance Corporation
The idea of an agreement freely negotiated between the parties has given way to the necessity for a uniform set of printed conditions which can be used time and again, and for a large number of people, at a cost less than an individually negotiated contract.[xx]
The construction of exemption clauses, so as to refuse their aid to a party in ‘fundamental breach of contract is undoubtedly the most important development in the modern law of contract.[xxi]
In L.I.C. v. Shakuntala Bai[xxii], the Andhra Pradesh High Court held that the insurance companies are very clever, they make it a condition of the contract that the truth of every one of the statement made by the insured in the proposal, personal statements etc. form the basis of the contract so that there is a warranty by the insured that all the statements made by him are true and if they are not, the contract is void. This shows that the liability of the insurance corporations is excluded when breach of a contract of insurance occurs.
Courts, when protecting an innocent policy holder against the harshness of the doctrine, did not state clearly that as a matter of public policy an insurance company cannot avoid liability merely because of the falsity of a statement which has been labelled “warranty”. They felt that freedom of contract prevented them from saying so. Instead they disguised as “interpretation” their efforts to change warranties into representations.[xxiii]
Inadequacy of the Indian Statute Law
The 103rd report of the Law Commission of India which was specially constituted to look into this complex matter of application of Standard Form Contracts or Adhesion Contracts analyzed all the issues and the relevant provisions and finally gave certain critical views to improve the provisions of the Indian Contract Act, 1872.
The main issue in the application of SFC’s is that of exemption clauses, which provides for exclusion of liability.
The 103rd Law Commission of India Report clearly expressed that the present Indian Statute Law is inadequate to deal with these issues. As early as 1909, Shankaran Nair J, in his dissenting judgement expressed the opinion that Section 23 of the Contract Act hits such exemption clauses; but this view has been rejected by the High Courts in later decisions, already referred to. There are a few cases where the Courts have valiantly tried to come to the rescue of the weaker party. But the legal basis of such decisions is elusive.
Recommendation of the Commission: The Commission felt that the solution to this problem would be to enact a provision in the Indian Contract Act, 1872, which will combine the advantages of the (English) Unfair Contract Terms Act, 1872 and Section 2.302 of the Uniform Commercial Code of the United States.
Fundamental breach of a contract is when a person who, as promised to perform a duty or make a delivery, fails to perform or delivers something else altogether. The breach is so fundamental that the contract is deemed to have not been performed in entirety in most cases and this puts an end to the said contract.[xxiv]
For more than twenty years, the doctrine of fundamental breach has been used by the courts as a technique of controlling unfair exemption clauses. In very many cases a clause excluding or limiting the liability, generally of a supplier of goods or services, has been struck down because of what is called a “fundamental” breach of contract.[xxv]
It becomes a critical issue in standard form contracts primarily because majority of such contracts have exclusion of liability clauses which are then used as a defence. But the courts have made it clear that clauses limiting or excluding liability fail to have their protective cover once there is a fundamental breach of the contract. However, the decision of fundamental breach itself, particularly in standard form contracts, has been very fact sensitive because such contracts are used for a large number of participants like in the form of insurance policies and, hence, a fundamental breach has to be studied on a case-to-case basis.[xxvi]
Origin of the Doctrine
The doctrine of fundamental breach traces its roots back to the United Kingdom with Lord Denning being its reputed founder. As originally formulated, the doctrine of fundamental breach provided that “where a breach of contract constituted a radical or fundamental departure from the obligations set out in the contract, an exculpatory clause that would otherwise have insulated the party in breach from liability would not have that effect.”[xxvii]
Lord Denning was of the view that this doctrine should be applied as a rule of law regardless of the parties’ intentions relating to liability. That is, if a party was in fundamental breach of its contractual obligations, such party should not, as a rule of law, be entitled to rely on an exclusion clause which limits or excludes its liability.[xxviii]
In consumer transactions, adhesion drafting exacts its most pervasive toll by limiting rights rather than by creating duties. In this manner the risk potential created by the sale of goods and services may be successfully defined to ensure stability and minimized to assure profit. This is accomplished by the drafting technique of “contracting out,” whereby clauses narrowing substantive responsibility and procedural remedy are incorporated into a contract. To the extent that these clauses anticipate future controversy and provide machinery for settling disputes, they are in the best tradition of legal planning. When bargained for, they deserve the favoured treatment the law accords to compromise and settlement. When not bargained for, however, they invite disfavour as an attempt by one party to make himself judge in his own case.[xxix]
The Concept of ‘Fundamental Breach’ in the CISG
Article 25 of the CISG defines Fundamental Breach: A breach of contract committed by one of the parties is fundamental if it results in such detriment to the other party as substantially to deprive him of what he is entitled to expect under the contract, unless the party in breach did not foresee and a reasonable person of the same kind in the same circumstances would not have foreseen such a result.[xxx]
The definition of a fundamental breach under Article 25 has two main components. The first is the detriment/ expectation component and the second is the foreseeability component. Although the detriment/expectation component is what makes a breach “fundamental,” liability for such a breach is limited by the affirmative defense of foreseeability. For a breach to be “fundamental,” the breach must cause a “detriment” that substantially deprives the non breaching party of its reasonable expectations. This detriment concept developed out of what were perceived weaknesses of the revised text of the ULIS. Those weaknesses were replaced by a substantial detriment test for fundamental breach.
Fundamental breach is one of the most practically important concepts in the CISG (Convention on Contracts for the International Sale of Goods). The existence of a fundamental breach in a contract governed by the CISG can lead to remedies, such as:
- substitution of non-conforming goods by the seller (Art.46(2)),
- avoidance of the contract on the ground of non-performance by the other party(Art.49(1)(a), 64(1)(a) and 73,
- avoidance of the contract for partial delivery (Art.51) and
- Transfer of risk (Art.70).
Applicability in Insurance Contracts
The doctrine of fundamental breach or breach of the fundamental term (as it is variously called and defined) has been evolved in an attempt to deal with the problem at a more basic level. The development of this doctrine has inevitably been closely related to the treatment of standardised contracts, since the majority of cases of fundamental breach call in question the validity of a supposedly all-embracing exclusion of liability clause.
Exclusion of liability clauses is usually used by insurance companies to avoid liability. In Skandia Insurance Co. Ltd. v. Kokilaben Chandravadan[xxxi], the Supreme Court held that the exclusion of liability clause has to be “read down” so that it does not conflict with the main purpose of the provision enacted for the protection of victims of accidents so that the promisor is exempt when he does everything in his power to keep the promise. It was highlighted that the exclusion of liability clause in insurance contracts should not be to cause more distress to the affected party but rather to relieve the aggrieved party.
In B. V. Nagaraju v. M/s. Oriental Insurance Co. Ltd., Divisional Officer, Hassan[xxxii], the main question that arose before the Supreme Court was that whether liability could be avoided on the ground of the breach of the insurance policy being so fundamental in its nature. Every contract contains a core or fundamental obligation which must be performed. If one party fails to perform this fundamental obligation, he will be guilty of a breach of contract whether or not any exempting clause has been inserted which purports to protect him. In this case, the insurance company had claimed complete exemption of liability and held the breach of the contract to be fundamental. The court, however, denied that it was not a fundamental breach since the accident had occurred due to the driver’s negligence and not due to the mistake of the insured, therefore, the company could not exclude the liability and would not be exempted from paying the due amount to the insured.
The failure of the company to take prompt action is said to be tantamount to a breach of a general duty towards the insured.[xxxiii] The main purpose of the insurance contract is to put the insured in a position before the loss occurred, however if the insurer denies his liability, then such a denial shall result in fundamental breach of the insurance contract as there is no performance of the contract. In this case, the doctrine of fundamental breach shall apply.
The doctrine of fundamental breach has serious deficiencies even though in the past years, the doctrine has evolved to accommodate the needs of the changing society. The central flaw being that it fails to focus attention on the unfairness of the clause in question. The doctrine’s applicability is not limited to contracts of adhesion, though it is with reference to such contracts that it promises to be of greatest utility. To understand the evolution of the doctrine of fundamental breach, it is necessary to examine the relevant evolutionary pattern in areas such as:
The law of bailment and sea carriers reveals two judicial stratagems for dealing with contracting out. The first, based on “deviation,” is the refusal to allow a party to rely on an exemption clause if he is violating the contract. The second is the disregarding of an exemption clause if it conflicts with the “main purpose” of the contract. Whether these techniques were anything more than rules of interpretation which artful draftsmen could circumvent remained unclear.
Article 70 of the CISG deals with “passing of risk” in the case of a breach of contract of the seller and situations in which such a breach may prevent the risk from passing to the buyer.[xxxiv] In cases of non-conformity of goods that constitute a “fundamental” breach, the buyer does not lose his remedies although the risk of damage or loss has passed to him. Therefore the buyer may declare the contract avoided if the non-conformity of goods already amounted to a fundamental breach at the time the risk passed to the buyer but the goods suffered further damage after the “passing of risk”.40 If the non-conformity of goods did not amount to a “fundamental” breach before the risk has passed, contract avoidance is not available to the buyer since he has to bear the risk.
Owing to the large scale commercialization of the activities, the companies which serves the millions of consumers daily started making a contract with them with the help of a Standard form of Contract or an adhesion contract, which enables them to occupy a large market share, as dealing with a separate consumer separately which requires a separate contract with them, which in turn is a time consuming process and a costly one. But since such type of contract are known as “leave it or take it, there are possibilities that the weaker party i.e. the client is in a position of exploitation. The client does not have appropriate legal remedy since it accepted the terms and conditions and signed it. To enable the protection for the weaker section of the society, the court developed the doctrine of Fundamental breach or fundamental terms.
The Indian Contract Act is not adequate enough to meet the needs of the changing times. With recent developments in business environments, the nature of the contracts also changes with new forms of contracts coming in. An adhesion contract is one such type. The present provisions which relate to general contracts are insufficient to deal with standard form contracts. New variations in the contract of adhesion make it difficult to apply the general contract law.
By eliminating the necessity of resorting to fictional interpretation, the doctrine of fundamental breach has made its greatest contribution. And, because of its flexibility, judges (and scholars) are now unleashed to develop a common law capable of striking down clauses which do not square with the fundamental obligations of their contracts.
The provisions of an insurance policy are to be liberally construed in favor of the insured, and that the court will not sanction a construction of the insurer’s language that will defeat the very purpose or object of the insurance. Courts have made great efforts to protect the weaker contracting party and still keep “the elementary rules” of the law of contracts intact. As a result, our common law of standardized contracts is highly contradictory and confusing, and the potentialities inherent in the common law system for coping with contracts of adhesion have not been fully developed.
Edited by Kanchi Kaushik
[i] Black’s Law Dictionary, 9th edn., p. 368
[ii] Ehrenzweig, Contracts in the Conflict of Laws, 53 Columbia Law Review 1072 (1953)
[iii] Todd D. Rakoff, Contracts of Adhesion: An Essay in Reconstruction, 96 Harvard Law Review 1173 (1983) at 1177
[iv] Law of Business Contracts in India, edit. by Sairam Bhatt, p.187 (Sage Publications, 2009)
[v] Ibid. at p. 189
[vi] H. Cockerel, Dictionary of Insurance (London: Witherby and Co. Ltd., 1980) at 101
[vii] Friedrich Kessler, Contracts of Adhesion–Some Thoughts about Freedom of Contract, Columbia Law Review , Vol. 43, No. 5 (1943) at 636
[viii] Telford F. Hollman, “Insurance as a Contract of Adhesion”, 1978 Ins. L.J. 274 (1978)
[ix] 1971-1973 LIFE CASES 1410, 451 Pa 218, 301 A2d 799 (1973).
[x] American Jurisprudence 2d, “Insurance” 271, at 331
[xi] David S. Miller, Insurance as Contract: The Argument for Abandoning the Ambiguity Doctrine, Columbia Law Review, Vol. 88, No. 8 (1988) at 1849
[xii] 44 Corpus Juris Secondum, Insurance 297, at 1183 (1945)
[xiii] Ibid. at 1199
[xiv] Supra note 10
[xv] LIC of India and Anr. v. Consumer Research Center and Ors. AIR 1995 SC 1811
[xvi] Central Bank of India v. Hartford Insurance Co. Ltd. AIR 1965 SC 1288
[xvii] Usha International Ltd. v. United India Assurance Co. Ltd. AIR 2005 Delhi 424
[xviii] F. A. Mann, Unfair Contract Terms Act 1977 and the Conflict of Laws, International and Comparative Law Quarterly, Vol. 27, No. 3 (1978) at 661
[xix] John N. Adams, An Optimistic Look at the Contract Provisions of Unfair Contract Terms Act 1977, The Modern Law Review, Vol. 41, No. 6 (Nov., 1978), at 703
[xx] J. Beatson, Anson’s Law of Contract, ed. 28, p.163, (Oxford University Press)
[xxi] Wedderburn, Contract-Exemption Clauses-Fundamental Breach-Main Objects of Contracts, 1957 CAMB. L.J. 16
[xxii] L.I.C. v. Shakuntala Bai AIR 1975 AP 68
[xxiii] Ehrenzweig and Kessler, Misrepresentations and False Warranty in the Illinois Insurance Code (1942) 9 U. OF CHI. L. REV. 209, 210
[xxiv] Nichol v. Godts (1854) 10 Exch. 191
[xxv] Waddams, S.M., Contracts–Exemption Clauses–Fundamental Breach–Unconscionability; 17 U. W. Ontario L. Rev. 295 (1978-1979) available at www.heinonline.org
[xxvi] Micheal Furmston, Cheshire, Fifoot & Furmston’s Law of Contract, (15th edn., Delhi: Oxford University Press, 2007) at 227
[xxvii] John D. McCamus, Essentials of Canadian Law: The Law of Contracts (Toronto: Irwin Law, 2005) at 754
[xxix] Alfred W. Meyer, Contracts of Adhesion and The Doctrine of Fundamental Breach, Virginia Law Review, Vol. 50, No. 7 (Nov., 1964), Pp. 1178-1199
[xxx] Andrew Babiak, Defining Fundamental Breach under the United Nations Convention on Contracts for the International Sale of Goods, 6 Temp. Int’l & Comp. L.J. 113 (1992)
[xxxi] Skandia Insurance Co. Ltd. v. Kokilaben Chandravadan (1987) 2 SCC 654
[xxxii] B. V. Nagaraju v. M/s. Oriental Insurance Co. Ltd., Divisional Officer, Hassan AIR 1996 SC 2054
[xxxiii] Franklin M. Schultz, The Special Nature of the Insurance Contract: A Few Suggestions for Further Study, Law and Contemporary Problems, Vol. 15, No. 3, Private Insurance (1950), at 381
[xxxiv] Alexander Lorenz, Fundamental Breach under the CISG available at http://www.jus.uio.no/pace/fundamental_breach_under_the_cisg.alexander_lorenz/portrait.pdf